I first bought this stock (TSX-ATD.B) in January 2004, and I bought some more in 2006 and 2007. My total return to date is 2.9%. All the growth figures are good for this stock except the ones for the stock price. The reason for this is that the P/E ratio used to be quite high (in 2006 it was 27) and now it is quite low (at 11.3 in 2010). This stock has a reporting year ending in April of each year.
In looking at insider trading, I find lots of insider selling over the last year to the tune of $3.3M. There was a tiny bit of insider buying. However, all this action took place in 2009 and there has been no insider trading for the current year of 2010. A good thing is that this company raised the dividend by 14% for the one paid in March 2010. This shows that management has faith in how well this company will do in the near future.
When I look at the P/E ratios for this company, I find that the 5 year average low is 13 and the 5 year average high is 20.5. The current P/E ratio, based on earning estimates, is 11.6. This is a relatively low P/E ratio and is not bad in absolute terms. I get a Graham Price of $18.51, based on earnings estimates. The current stock price of $20 is just 8% higher. On average, the low yearly stock price is 10% higher than the Graham Price. But, over the past two years, the Stock price has hit prices at around 30% lower than the Graham Price. However, this is a growth stock and you would expect the stock price to be generally higher than the Graham Price.
I get a current Price/Book Value Ratio of 2.26 and the 10 year average is 2.88. So the current P/B ratio is just under 80% of the 10 year average. The P/B ratio points to a current good stock price. The last thing is the dividend yield. The 5 year average yield is just .7%. However, the yield has been increasing lately and it reached as high as 1.2% in the last financial year. Currently the yield is .8%, which for this stock is probably not bad.
So, what do the analysts say? I find lots of Strong Buy, Buy and Hold recommendations. There are no others. The consensus would be a Buy. (See my site for information on analyst ratings.) Analysts talk about this stock being hit by the economic slow down and that, in the future, their profit margins should improve, especially when the US economy picks up. The difference between the Hold recommendations and the other recommendations is dependant on how much the analysts feel the stock price will pick up over the next year. Some think $20 is 1 year target price and some think that $25 is the 1 year target price.
I am happy with my investment in this company at present, and I will continue my investment in this company. However, I have no current plans to add more stock to my portfolio in the near future.
Alimentation Couche-Tard is Canada’s leading convenience store retailer under brands such as Couche-Tard, Mac’s, Becker’s, Mike’s Mart and has US brand Circle K. The company has alliances with fast-food chains including M & M Meat Shops, Pizza Pizza , Subway and Irving Oil. They just opened up Circle K brand in Vietnam. They are expanding into the U.S., having bought Johnson Oil, a major gas station and convenience store operator. Ownership of this company is such that Développements Orano Inc. owns 42% and Metro owns 22%. Its web site is here Alimentation . See my spreadsheet at atd.htm
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
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