On Friday the S&P 500 was up 1.1% and Toronto was up 0.6%.
Most of our stock picks were up and Canadian Western Bank was up another 3.2%.
Alimentation Couche-Tard is updated and rated (lower) Buy at $77.50. This has been an incredible and somewhat under the radar success story. The CEO and main founder opened his first convenience store in 1980. He joined with three others who became the long-term management and effectively his partners around 1984. In 1986 a predecessor company went public on the Montreal Stock exchange with 34 stores. Growth through acquisition has been relentless. The company now has 6,215 company-operated stores and an additional 2200 stores which are franchised and/or to which it provides fuel. The founder is a billionaire and the equity market value of the company is almost $15 billion. In 2012 it acquired a chain of stores in Europe paying a 52% premium to the stock price at that time. Despite the premium the price paid was apparently attractive and the acquisition has worked out brilliantly. The balance sheet indicates that the company has taken in a total of $696 million in shareholder capital (via share issues and acquisitions paid in shares over the years). By comparison it has earned more than that amount in the past year alone and the retained earnings are $2,786 million. The company had no usual advantages and I therefore attribute its great success to the drive and skills of management. Today, the share price does not look like a bargain. If I owned it (sadly I sold on the way up) I would probably trim the position. Having sold at much lower prices I personally am not inclined to buy back in. However setting emotions aside a reasonable strategy might be to take a small position and then hope for a price drop to add to the position.
Buying a small amount and hoping for a price drop may seem strange but it hedges the bet. If it rises, fine. If it falls we may regret the initial purchase but the chance to buy more shares of a great company at a better price would be ours.