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Opinions Steve Belisle
Element Fleet ManagementEFN.TOTOP PICKSep 08, 2016
Steve BelisleStock price when the opinion was issued
As of Jun 19, 2026. Market Open.
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Getting up into large cap territory. Economic for companies to outsource to them. 14x earnings. Yield almost 3%.
Alex Ruus
EPS of $0.31 beat estimates of $0.27 and revenues of $303.96M beat estimates of $282.22M. Net revenue grew by 16.5% for the quarter and it generated $0.37 of free cash flow per share for the quarter. Its capital-light business model expanded its ROE to 12.0%, and management raised its full-year 2023 guidance for net revenue, operating margin, adjusted operating income, adjusted EPS, free cash flow per share, and originations. It pays a yield close to 2%, has demonstrated strong margin expansion, forward estimates for growth are good, and it trades at a reasonable valuation. It does have a high net debt balance of $9.4B, but these were strong results and the market has reacted positively so far. We would consider the stock buyable at this time while being mindful of position sizing and the company's balance sheet risks.
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Capital light, free cashflowing, cleaner story for investors. Valuation still reasonable. Supply chains easing allows them to deliver on backlog of contracts. Fix up cars, so it's downside protection and inflation-protected. Inflation does eat into some of their margins. Should perform well over the next few years, and valuation should expand. Focused on becoming data-centric to better serve its clients. Global. Yield is 2.27%.
(Analysts’ price target is $23.33)
James TelfserEFN pays a dividend yield of 2.2%, has shown decent growth over the past year, and has a strong profit margin.
Its valuation is reasonable (6.2X forward P/S and 15.9X forward P/E).
Its net debt of $8.9B relative to its equity position of $3.7B is somewhat concerning, although the company generates some positive free cash flows. Aside from its somewhat weak balance sheet, its margins and revenue growth look decent, and we would consider the stock buyable at this time while being mindful of position sizing and the company's balance sheet risks.
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Average investors don't know about company.
Very undervalued company.
Excellent management with good assets.
Fantastic niche position.
Strong business model going forward.
Alex Ruus
Bruce Campbell (2)Alex RuusAlex Ruus
Peter Imhof
Alex Ruus
Alex Ruus
The split coming up should unlock some value. They should soon launch their 2nd investment fund, and if successful that could reassure investors that the business model for the ECN Capital part is working. Also, expects a dividend increase at the end of the year. Small-cap investors might not have been able to buy the stock at this stage, because the market CAP is too high, but after the split, ECN Capital will be eligible for most small-cap investors, and that is how we will see the valuation come back up. Dividend yield of 0.7%.