Element Fleet Management (EFN.TO)

Just acquired PHH’s North American fleet management business. This is an excellent acquisition, and over the coming years they are going to be able to take some costs out, and run it in a more efficient manner.

There was a big financing on a big US leasing deal, which now has to be digested. This is accretive by 10%-15% so this takes his one-year target closer to $18. Looks relatively cheap on forward earnings.

Have built it up as the dominant leasing company in North America for trucks, rail cars and office equipment. Just did a gang buster acquisition of a US firm. They create tremendous value for shareholders. They should do very well here. There are three preferred share 5 year rate resets if you want yield. Buy equity for growth.

(A Top Pick Feb 6/14. Up 2.87%.) Taking advantage of what happened in 2008 when a lot of US industrial companies deferred or stopped purchases of new equipment. There is a lot of new equipment being purchased and leased now and, at the same time, a lot of companies that were doing the leasing have either retreated or downsized. Made a big acquisition and about 75% of the financing was considered to be equity. Yield of 0.29%.

She is looking at this. They have grown quickly. Growth is by acquisition, and they just made a $1.4 billion acquisition of an auto leasing firm.

Likes it here still. They are well diversified. They have been growing and levering up the balance sheet more. Some of the weakness recently is from the rumour that they are going to make a huge acquisition soon. Likes it as a longer term play.

It is a financial company and must use a lot of leverage to expand its earnings base. Now they have to show earnings growth. It is hard to show organic growth when you are making so many acquisitions. Now they have to prove themselves. He has been looking at it, but it is frothy and expensive.

A leasing company. All kinds of infrastructure with the latest thing being rail cars. There is a lot of ramp-up that they can do and acquisitions they can make over the next 4, 5, 6 years. This business is usually levered. The balance sheet is levered from a traditional business, but still at about half of what they could do. He can see $17-$18 in a year.

It’s an expensive stock and volatile. Has been a great mover in the last couple of years. The story is still intact. He likes the game plan and is comfortable they can execute in it.

Recently sold it because of the ranking in his model. Another growth by acquisition story.

A core name for him. Have a very interesting business model that is on track and will allow them to continue to grow versus some of the other financials that are struggling to grow. Stock is taking a bit of a pause while people are waiting for the next deal, based on his research and view of the market and the deals that are coming. Very, very strong balance sheet.

You are going to see volatility because it is a new company and they are breaking ground. It is a question of where they grow. There is no reason to sell it though.

Very, very solid non-bank financial. Doesn’t own any of the banks, but owns this and Alaris Royalty (AD-T) in a big way. They are unique companies, really well managed that have leading market positions in their niches. This company is making tuck in acquisitions that they are able to enhance value on. (See Top Picks.)

Chart shows a consolidation period in 2012 followed by a breakout and the trend is still higher. Just don’t let it take out the low of around $12.00. Making new highs.

Leasing. Did a helicopter acquisition from General Electric (GE-N) and railcars from Trinity (TRN-N). Both of these things add to their earnings forecasts. He likes this. Has a one-year target of $18.