# Cervus Equipment Corp (CVL-T)



## Klarman (May 20, 2015)

Anyone familiar with this company? It is involved in operating and acquiring equipment dealerships across Canada, New Zealand, and Australia. They operate in 3 distinct segments: Agriculture, Transportation, and Construction/Industrial. Around 65% of their business is derived from John Deere equipment sales, rentals, parts, and service. Recently they have expanded their transportation dealerships by acquiring Peterbilt of Ontario.

The company reported a poor first quarter in 2015 which was mainly due to the lower oil price environment and its effect on the construction and industrial business, a build up of used inventory, and costs associated with integrating acquisitions in 2014. At todays levels (~$17) this stock looks extremely cheap. Tangible book value per share is ~$15 per share, and the company is expected to earn around $1.10-$1.20 per share in 2015. It is important to note that the company has settled a CRA tax conflict from 2009 when it converted from a trust to a corporation (this cost the company around ~$31MM in a non-cash write down of which will flow through the income statement). I think the company would probably earn somewhere closer to $1.40-$1.50 if it were not for this CRA write-down and higher than expected acquisition costs. 

I would appreciate and input on this company or industry in general.

Thanks!


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## leeder (Jan 28, 2012)

I looked into this in the past. It has an attractive and growing yield, but I haven't seen any growth in this company even while oil prices are strong. The demand for these machinery hasn't been strong for the past while. Thus, there is a lot of inventory building up. The CRA issue didn't really help. 

If you're in it for the yield, I'd say this is not a bad name to be in. I wouldn't expect a whole of capital appreciation though.


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## martinv (Apr 30, 2009)

I bought CVL last May at 21.55. Today it is 17.00 so down 22%. Bought for the long term so will see how this plays out.


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## Ponderling (Mar 1, 2013)

I'm sitting on this one, even though recent price has slid. Servicing farm equipment and commercial trucks seemed to be mostly resistant to the worst slumps a recession might throw at this company.


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## new dog (Jun 21, 2016)

Under $12 right now and now goes under the symbol CERV.


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## SaveMoolah (Apr 4, 2017)

What's a good entry point?


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## martinv (Apr 30, 2009)

Bought at 21.55 and it is now 11.96. Down 44%.
They also cut the dividend by 2/3 in 2016.
I seem to never sell, so hoping for a recovery in the share price sometime in the future!


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## Ponderling (Mar 1, 2013)

sold in 2015 to claim the loss. Looks to maybe be worth considering getting back into - I will look again when the tax return comes in.


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