The report for AutoCanada is updated and rated Speculative Buy at $12.45. The future of this investment is heavily dependent on the abilities of the new management team that took over in July. They have made a number of changes and they seem to have credible plans for big improvements starting by January 1.
The stock has had welcome bounce since reporting (terrible) Q3 results last week. Unfortunately, the stock could easily sink back down since it is going to take four to six months before it can possibly report a recovery in profits.
The Q3 report and conference call revealed their plans for improving things. It also revealed even more evidence that their acquisition (by the former management) of dealers in the Chicago area was a horrible mistake. It was apparently totally botched as they paid too much and these dealerships apparently are not even breaking even on an operating income basis. Half of their directors left soon after that acquisition. It’s not clear if they left in protest of a dumb acquisition or were they forced out because they agreed with it?