# ATD.B - Alimentation Couche-Tard



## mattw (May 14, 2013)

What are everyone thoughts on this stock?

They have been constantly growing and buying up locations with success. Most stores do not appear to be run-down like they I recall them being years ago, and on trips to Phoenix noticed a few Circle K's that seemed busy. The purchase of StatOil locations seems to have been positive. Been producing strong FCF and with good ROC, think they can continue growth and consolidation of the industry. They also appear to own the land for many locations. The margins have increased this year and sames sales growth has been positive although under 2%.

I purchased some mid last year and considering adding more funds.


----------



## avrex (Nov 14, 2010)

I like ATD.B as well.
Growth metrics and sales look great.
However, the Price/Book seems a bit high.

Nevertheless, I think ATD.B would be a great buy.


----------



## scomac (Aug 22, 2009)

I've owned this for a long time. It always seems expensive. You just have to plug your nose and buy it. That said, I wouldn't buy it right now, but rather wait for the inevitable stumble. It's one of the handful of true growth companies in Canada. That list is short and select.


----------



## moose (Nov 19, 2013)

Bringing this one back from its long slumber! Anyone holding? Can't say I feel too good about the 4% drop today and they have earnings coming out on Thursday...

Figure this is a Quebec election thing? CGI was also down about 4%...


----------



## Asterix (Jul 19, 2012)

I'm still holding after having gone in at $59. I have no plans to sell at the moment.


----------



## moose (Nov 19, 2013)

Strong day today for the ol' Couche Tard! Bouchard hands off the CEO role and they also announced a split yesterday (3:1) effective mid to end of April, in an attempt to make the stock more accessible to retail investors...


----------



## maxandrelax (Jul 11, 2012)

moose said:


> Strong day today for the ol' Couche Tard! Bouchard hands off the CEO role and they also announced a split yesterday (3:1) effective mid to end of April, in an attempt to make the stock more accessible to retail investors...


 It would be pretty funny if a convenience store operator let their stock go to the hundreds. Gotta keep the prices low!


----------



## mattw (May 14, 2013)

I don't plan on selling bought shares in September and January. Briefly glanced the quarterly reports and nothing fundamental seems to have changed!


----------



## JordoR (Aug 20, 2013)

I was looking at this back in mid-January when it was the $80 mark. I just couldn't personally justify spending that high of a value on a convenience store business hahah... kicking myself a bit now.


----------



## noobs (Sep 27, 2015)

How do you guys feel about Couche-Tard aggressively buying companies? I mean in the past couple of years they were on a spending spree and today another deal went through sending the stock up 7%


----------



## MrsPartridge (May 15, 2016)

Why is this stock slipping all of a sudden?


----------



## james4beach (Nov 15, 2012)

Perhaps today's move coincides with Metro (MRU) jumping nearly 9% today on M&A news. Metro may acquire a giant pharmacy chain. This is seen as positive for Metro and perhaps it's a negative for ATD.B -- just guessing here


----------



## AltaRed (Jun 8, 2009)

Jean Coutu owns some $2B worth of ATD.b and it presumably will be sold as part of the merger. Headwinds (at least uncertainty) for ATD.b stock for some time unless it goes in a block (s) to someone else.


----------



## doctrine (Sep 30, 2011)

Metro owns $2B of ATD.B stock, not Jean Coutu. Metro will likely spin out those assets to pay for the deal.


----------



## AltaRed (Jun 8, 2009)

doctrine said:


> Metro owns $2B of ATD.B stock, not Jean Coutu. Metro will likely spin out those assets to pay for the deal.


Good catch.


----------



## jargey3000 (Jan 25, 2011)

Today : 59.79CAD decrease 3.92 (6.15%)
anybody buying the dip today?


----------



## damaaster (Mar 27, 2015)

jargey3000 said:


> Today : 59.79CAD decrease 3.92 (6.15%)
> anybody buying the dip today?


If I had some cash in my TFSA i'd definitely buy some more right now. Unfortunatley I don't


----------



## CPA Candidate (Dec 15, 2013)

Alimentation is trading at the lowest multiple of forward earnings that I can recall, 13.9 according to morningstar. The tax changes in the US, where most of their business is, will increase net margins.

There are hundreds of millions of dollars in synergies from their acquisitions that have yet to be realized and they maintain an ROE of > 20% and ROIC of 12%.

I believe this is an opportunity to take advantage of investor malaise for the company's shares. One theory advanced is that the company will be in trouble once electric vehicles take over, but I believe that is an idea way, way ahead of reality.


----------



## doctrine (Sep 30, 2011)

I agree it is a good price. The growth by acquisition story might be over though, and its doubtful they can obtain 15-25% earnings growth. The declining multiple might be an opportunity to take advantage of higher shareholder cash returns, perhaps. The trailing P/E is closing in on 15. I would have to look a little closer, but in general if the P/E is below 15, and the organic/cost cutting EPS growth can stay above 5%, it would be a great buy.


----------



## newfoundlander61 (Feb 6, 2011)

*ATD.B Alimentation Couche-Tard*

I was considering adding this stock to my current portfolio (wifes TFSA) but was reading this evening after the recent earnings released today that: "The Quebec-based retailer says the two for one split of its Class A and B shares will take effect Sept. 20." Any difference in buying now or waiting until the stock split? I am thinking their is no real difference but won't hurt to ask. Thankyou.


----------



## AltaRed (Jun 8, 2009)

Should not be any difference. Don't know why they would do a split. Odd lots are not a big issue any more for those who cannot buy in multiples of 100 shares.


----------



## newfoundlander61 (Feb 6, 2011)

Thanks Red


----------



## AltaRed (Jun 8, 2009)

newfoundlander61 said:


> Thanks Red


At one time, odd lots were difficult to execute, making it more difficult for retail investors to buy sufficient numbers of shares. Doing a 2 for 1 split, thereby halving the share price, supposedly made the company's shares more accessible and thus an opportunity for share price growth. That is no longer the case (or shouldn't be) and thus why so many companies* now have share prices well in excess of $100. It costs the companies money to do a share split, so bottom line, I have no f*ing idea why ATD.B is doing what it is doing. As a shareholder myself, I am pissed. It isn't as if$80/share is excessive. There are better ways to spend shareholder money. 

* Example: FFH at $592. No difference between 20 shares at $592, or 40 shares at $296 or 100 shares at $118.40


----------



## Just a Guy (Mar 27, 2012)

How many shares, if any, of Berkshire Hathaway can you buy if you wanted to?


----------



## AltaRed (Jun 8, 2009)

Just a Guy said:


> How many shares, if any, of Berkshire Hathaway can you buy if you wanted to?


The B's are about $205 USD.... so a full position would be about 400-500 shares for me. Only institutions can afford the A's at over $300k


----------



## kelaa (Apr 5, 2016)

Not a value or high growth stock at this point anymore. I think most view ATD as fairly valued.


----------



## AltaRed (Jun 8, 2009)

Hard to know. Their Circle K roll out continues and they are likely gearing up for more acquisitions. There is huge consolidation potential in this business.


----------



## kelaa (Apr 5, 2016)

For one I would not want to bet on long term tobacco sales. And the competition bureaus have a habit of limiting your gas station market share. I note they were shopping around in Australia this year, but lost out on the latest bid.


----------



## AltaRed (Jun 8, 2009)

Tobacco seems to be stuck in the 15-20% range for a long time. A slow decline is inevitable but unfortunately may never drop below 10%. There is lots of room to roam in the USA yet. I'd be more concerned about conversion to EV (vs gasoline sales) than store sales.


----------



## kelaa (Apr 5, 2016)

Yes, EV's will definitely be huge within the next two decades. From a market and technological standpoint, I would lean toward the far end of that timeframe. But I fear a drastic climate-change administration in the US can greatly tip the scales against combustion engines. ATD have good locations for charging stations, but they might not have enough real estate realistically. It think maybe grocery stores / supercenters / malls with their large lots can easily install a lot of charging stations and give the customers something to do for 30 minutes while their cars are charging.


----------



## like_to_retire (Oct 9, 2016)

kelaa said:


> It think maybe grocery stores / supercenters / malls with their large lots can easily install a lot of charging stations and give the customers something to do for 30 minutes while their cars are charging.


Why would people be charging their cars at a mall. Won't we all be charging our cars overnight at home, and that will get us through the day?

ltr


----------



## AltaRed (Jun 8, 2009)

Those who are on road trips will have to charge enroute. Operators like ATD.B will likely expand their store offerings to eateries and entertainment/gaming centres. The bigger challenge will be neighborhood stations where none of the locals will need to charge (apartment dwellers aside).


----------



## kelaa (Apr 5, 2016)

Yeah, that'll work for many people. 

Some possible reasons:
Not everyone has a garage or even a driveway. 
You were on a trip away from home. 
You forgot to plug it in the night before.
You might exceed the 150 km / 200 km (fair-weather) range.
You have two cars and only one charger, etc.


----------



## like_to_retire (Oct 9, 2016)

kelaa said:


> Yeah, that'll work for many people.
> 
> Some possible reasons:
> Not everyone has a garage or even a driveway.
> ...


Yeah, those all make sense. I use to live downtown for about 5 years at one time and none of the houses had driveways (as they were built before cars were invented - many downtown areas are like this). I had to buy a permit and so I was allowed to park anywhere on the street. I often wonder how electric cars will work for those people?

ltr


----------



## AltaRed (Jun 8, 2009)

They won't. They will have to go a third party for their 20-30 minute fix.


----------



## Ponderling (Mar 1, 2013)

actually in toronto a guy got permission to put in front yard pad to charge his otherwise on street parked electric car. expect that to be contentious

but yes, we own this as a consumer staple stock.


----------



## newfoundlander61 (Feb 6, 2011)

Couche-Tard quarterly profit nearly doubles despite lower revenue - BNN Bloomberg


----------



## andrewf (Mar 1, 2010)

AltaRed said:


> They won't. They will have to go a third party for their 20-30 minute fix.


That will be the grocery store, the gym, the mall etc.


----------



## mattw (May 14, 2013)

ATD has a large presence in Europe so will be interesting to see how a move EV change the business. 
They own a high % of locations that would not doubt is undervalued.


----------



## newfoundlander61 (Feb 6, 2011)

Couche-Tard profit surges despite fuel price drop


----------



## doctrine (Sep 30, 2011)

Massive beat. I heard estimates of $0.40 a share, down 20% year over year. In fact they were up 47% year over year. And this was through the worst 3 months of the pandemic - looks like massive drop in fuel sales was fully offset by increased retail margins. I don't own any shares but that is a epic beat and also makes ATD quite reasonably priced.


----------



## MrBlackhill (Jun 10, 2020)

Seems like investors didn't like the news about Carrefour offer. Could be an opportunity to buy at discounted price.


----------



## mattw (May 14, 2013)

MrBlackhill said:


> Seems like investors didn't like the news about Carrefour offer. Could be an opportunity to buy at discounted price.


Potentially. I'm not sure why they are bidding on an overseas grocery chain as goes against the business model. Sounds like the deal might not go through.
But leaves me questioning management and this decision.


----------



## like_to_retire (Oct 9, 2016)

mattw said:


> Potentially. I'm not sure why they are bidding on an overseas grocery chain as goes against the business model. Sounds like the deal might not go through.
> But leaves me questioning management and this decision.


Actually the bid for Carrefour is right within ATD's wheelhouse and adds to their international exposure.
Carrefour has 12,500 stores in 30 countries (Europe, Latin America, Asia) with *7,200 convenience stores,* so they're not just bidding on a grocery chain.

ltr


----------



## londoncalling (Sep 17, 2011)

I've always shied away from this one as it offers next to zero dividend. I have taken a closer look and the dividend growth along with SP appreciation have been great over the years. There are many others that I have always thought to expensive (CP,CNR, CSU, AAPL, AMZN). Ignoring the Mar 2020 cratering that the market took, the near $6 drop over the past couple days brings the price close to what it was at the start of 2019.


----------



## AltaRed (Jun 8, 2009)

like_to_retire said:


> Actually the bid for Carrefour is right within ATD's wheelhouse and adds to their international exposure.
> Carrefour has 12,500 stores in 30 countries (Europe, Latin America, Asia) with *7,200 convenience stores,* so they're not just bidding on a grocery chain.
> 
> ltr


Potentially the strategy is to eventually keep the convenience chain and spin off the grocery business. Not that I have a feel for how divergent those two businesses are in other parts of the world relative to North America. I don't go around comparing convenience stores vs grocers when I visit Europe.

Re: Post #45 - That is data mining picking stock price over the past 2 days relative to the longer trend. ATD's stock price movements have always been bumpy, i.e. flat for some time and then a surge and then flat again depending on when they make an acquisition and how long it takes to assimilate and integrate the business. True, one does not buy it for the dividend. One buys it for the Return on Equity and/or Return on Capital Employed which equates to Total Return longer term. It is had to argue with the 10 year chart: About $4 in early 2011 vs $35-45 today (current aberration will pass) plus small dividend. That is at least a 10 bagger in 10 years.


----------



## doctrine (Sep 30, 2011)

I never bought into ATD because of valuation and low dividend, but I have to say it looks very attractive here and is now on my watch list. I will have to watch and see with this acquisition though. I doubt they will get it without endorsement from the French government.


----------



## newfoundlander61 (Feb 6, 2011)

Its amazing how many people must shop at this stores in Ontario as an example. Not sure if others are the same but they have nothing I need and many items are likely most expensive to buy but it appears the business works.


----------



## AltaRed (Jun 8, 2009)

Nor do I but the bulk of the profits are the Circle K type stores and not the fuel. The looming issue though is how do they re-invent themselves when cars go EV and don't have to stop for fuel. The stores will have to morph into something different than today.


----------



## like_to_retire (Oct 9, 2016)

AltaRed said:


> Nor do I but the bulk of the profits are the Circle K type stores and not the fuel. The looming issue though is how do they re-invent themselves when cars go EV and don't have to stop for fuel. The stores will have to morph into something different than today.


Yeah, I'm sure they have designs on adding EV chargers, but most people will be charging their cars at home. 

ltr


----------



## bgc_fan (Apr 5, 2009)

AltaRed said:


> Nor do I but the bulk of the profits are the Circle K type stores and not the fuel. The looming issue though is how do they re-invent themselves when cars go EV and don't have to stop for fuel. The stores will have to morph into something different than today.


They are convenience stores open at all hours. So there's always going to be some traffic, particularly if they sell alcohol. With EVs, you may still have people who require charging, i.e. people out of town, people living in apartments and condos with limited or no access to charging stations. Given the time to charge, they could always set up a small eating area like you see in stops along the highway. But we're talking about dozens of years down the road before gas cars are no longer around (if ever), so there'll still be some need for gas. You just have to look at who their regular customer base is (which I don't know), but I doubt the transition to EV would make that much difference.


----------



## P_I (Dec 2, 2011)

My sister and BIL both drive EVs. When they travel to family cottage they have to make plans for a charging stop, typically on the return trip. Unlike my two minute refueling stop where I just wait by the pump, their stop generally takes a minimum of 15 minutes. So there is available 'wait' time for the co-located convenience store. I would guess that Couche-Tard will leverage this stoppage time to their advantage, i.e. high margin in the Circle K store.


----------



## AltaRed (Jun 8, 2009)

I think all of those things are right to some degree. Traffic will still go to Circle K's for the convenience at significant markup for quick items on the way home and IF they install EV chargers AND they offer something else for customers to do for 20-30 minutes, those who don't have ability or convenient means to charge at home or work will stop, charge and shop//play. I see the addition of some entertainment capability including WiFi lounges, etc. I still see a decline in traffic eventually but I am obviously not worried. I have a full position in this stock and added a bit to it a few days ago at $37.02


----------



## Spudd (Oct 11, 2011)

The French government appears to be against this acquisition:


 https://www.cbc.ca/news/business/quebec-france-couche-tard-1.5874992


----------



## andrewf (Mar 1, 2010)

When are they not...


----------



## AltaRed (Jun 8, 2009)

andrewf said:


> When are they not...


They are a paranoid parochial bunch. Any hint of foreign ownership and they get a knot in their knickers. A cultural thing it seems.


----------



## andrewf (Mar 1, 2010)

Didn't they try to block an acquisition of Danone, because dairy products are of strategic nation interest?


----------



## bgc_fan (Apr 5, 2009)

And so it ends: Exclusive: Canada's Couche-Tard drops US$20 billion Carrefour takeover plan - source

"Food security is strategic for our country so that's why we don't sell a big French retailer. My answer is extremely clear: we are not in favour of the deal. The no is polite but it's a clear and final no," Finance Minister Bruno Le Maire said.

Now, if it were only a matter of Couche Tard only interested in the convenience stores, and spun off the supermarket side, do you think they could have worked out a deal? It would be more in-line with their business model and probably get a toehold in Europe.


----------



## Eder (Feb 16, 2011)

I think in the long run ATD is better off not blowing its brains out over extending themselves, especially off continent.

Maybe they should try buy Oxxo off of FEMSA in Mexico FMX (NYSE) 75.75 ▼ -1.14 (-1.48%) . They are gold mines down there...over 18,000 of them and FMX is at 5 year low ...pay in pesos!

And Couche is already there anyway... Mexico City-based brewer Grupo Modelo sold its 880-unit Extra c-store chain in Mexico to Circulo K, an independent franchisor for Mexico to which a subsidiary of Laval, Quebec-based Alimentation Couche-Tard Inc. has granted a license for the rights to the Circle K brand in Mexico.

Maybe ATD can ship me a finders fee.


----------



## fireseeker (Jul 24, 2017)

AltaRed said:


> They are a paranoid parochial bunch. Any hint of foreign ownership and they get a knot in their knickers *lingerie*. A cultural thing it seems.


----------



## andrewf (Mar 1, 2010)

bgc_fan said:


> And so it ends: Exclusive: Canada's Couche-Tard drops US$20 billion Carrefour takeover plan - source
> 
> "Food security is strategic for our country so that's why we don't sell a big French retailer. My answer is extremely clear: we are not in favour of the deal. The no is polite but it's a clear and final no," Finance Minister Bruno Le Maire said.
> 
> Now, if it were only a matter of Couche Tard only interested in the convenience stores, and spun off the supermarket side, do you think they could have worked out a deal? It would be more in-line with their business model and probably get a toehold in Europe.


Couche Tard has a pretty big business in Europe, no--Scandinavia, etc.?

With antics like this, I wonder if we should require French firms to divest all their assets in Canada. Alstom bought Bombardier's rail business.


----------



## bgc_fan (Apr 5, 2009)

andrewf said:


> Couche Tard has a pretty big business in Europe, no--Scandinavia, etc.?
> 
> With antics like this, I wonder if we should require French firms to divest all their assets in Canada. Alstom bought Bombardier's rail business.


Looking at the Wikipedia, it looks like Couche-Tard bought Statoil Fuel & Retail, which accounts for their Scandinavian presence. With Circle K they have some minor European presence, but nothing major in western Europe, much less the presence that Carrefour has.

A bit late for that. We've done this sort of thing before when it comes to China. 

But as an aside, Ottawa bought their LRT trains from Alstom... maybe they should have went with Bombardier, but that's a moot point now.


----------



## mattw (May 14, 2013)

They already have a presence in Europe and growing. Not sure why we are that surprised France has rejected. Quebec also has special rules and any bid for ATD would be rejected by the government. Hopefully they can pick off their convenience stores.


----------



## bgc_fan (Apr 5, 2009)

mattw said:


> They already have a presence in Europe and growing. Not sure why we are that surprised France has rejected. Quebec also has special rules and any bid for ATD would be rejected by the government. Hopefully they can pick off their convenience stores.


Not that I disagree that we shouldn't be surprised, but Quebec hasn't been very successful on blocking bids. Bombardier obviously went without protest, but the takeover of Rona by Lowe's was contested, and it still went through. Rona's tragedy in three acts: From Quebec's foreign takeover block, to deal with Lowe's, to store closures

Edit: Also to point out, Quebec blocked it the first time by actually buying enough of Rona to block the vote. France didn't buy a controlling share of Carrefour, as far as I can tell.


----------



## Ponderling (Mar 1, 2013)

I have held these guys for at least 5 years in my tfsa and been happy with their execution. So on the dip with the most recent turmoil I viewed it as this stock going on sale and reinforced my existing position.


----------



## londoncalling (Sep 17, 2011)

Alimentation Couche-Tard boosts dividend even as profits slip in latest quarter (msn.com) 

a 4.5% drop today and a dividend increase. Was near 52 week highs yesterday and is only back to where it was a couple weeks ago. I have always had a hard time finding an entry point for this stock. It has been on my watch list for years.


----------



## like_to_retire (Oct 9, 2016)

londoncalling said:


> Alimentation Couche-Tard boosts dividend even as profits slip in latest quarter (msn.com)
> 
> a 4.5% drop today and a dividend increase. Was near 52 week highs yesterday and is only back to where it was a couple weeks ago. I have always had a hard time finding an entry point for this stock. It has been on my watch list for years.


I know. I love it when a company boosts the dividend and the market doesn't like it. I remember I held a very small entry position in ATD.B last year, but wanted more in the Consumer Staples sector, and missed the rare opportunity in Mar 2020 when it dipped to the $32 range, but then I was able to get a full position in Jan 2021 this year at $37.72. A good company for sure. 

Myself, any of my Canadian stocks with a dividend under about 2.5%, I generally consider dividend growth, even though they pay a small dividend, most of their earnings are plowed back in. There's not a lot of them to choose from. The ones I own in Canada, and their dividend yield, such that I consider them dividend growth are ATD.B = 0.91%, CCL.B = 1.3%, DOL = 0.35%, MRU = 1.6%, SAP = 2.4%, CNR = 1.48%, CP = 0.8%. 

ltr


----------



## londoncalling (Sep 17, 2011)

like_to_retire said:


> I know. I love it when a company boosts the dividend and the market doesn't like it. I remember I held a very small entry position in ATD.B last year, but wanted more in the Consumer Staples sector, and missed the rare opportunity in Mar 2020 when it dipped to the $32 range, but then I was able to get a full position in Jan 2021 this year at $37.72. A good company for sure.
> 
> Myself, any of my Canadian stocks with a dividend under about 2.5%, I generally consider dividend growth, even though they pay a small dividend, most of their earnings are plowed back in. There's not a lot of them to choose from. The ones I own in Canada, and their dividend yield, such that I consider them dividend growth are ATD.B = 0.91%, CCL.B = 1.3%, DOL = 0.35%, MRU = 1.6%, SAP = 2.4%, CNR = 1.48%, CP = 0.8%.
> 
> ltr


Saputo is one that I haven't followed as of late but just did a quick look and it is trading at 2015-2016 share price. Am going to take closer look.


----------



## P_I (Dec 2, 2011)

Heads-up for those holding ATD.B shares. Conversion of the ATD.B shares into a single class of shares takes effect tomorrow, December 8, 2021 per the announcement that was made Friday evening,

Alimentation Couche-Tard Announces Upcoming Automatic Conversion of All Outstanding Class B Subordinate Voting Shares



Couche-Tard said:


> LAVAL, QC, Dec. 3, 2021 /PRNewswire/ - Alimentation Couche-Tard Inc. ("Couche-Tard" or the "Corporation") (TSX: ATD.A) (TSX: ATD.B) hereby notifies its shareholders that in accordance with the articles of the Corporation all of its outstanding Class B subordinate voting shares ("Class B Shares") will be automatically converted into Class A multiple voting shares of the Corporation ("Class A Shares") on a one-for-one basis on December 8, 2021, contrary to mid-December as previously communicated. All Class B Shares of the Corporation will be delisted from the Toronto Stock Exchange ("TSX") at the close of trading on December 7, 2021. Commencing on December 8, 2021, only Class A Shares of the Corporation will trade on the TSX under the symbol "ATD".


----------

