Element Fleet Management (EFN.TO)

He owns this. Frustrated because they had a good thing going and the management team got pushed, for one reason or another, to break the company up into 2. It is pretty quiet about how they are going to go about doing that.

Has been watching this for some time. It has 4 segments, and they are going to split the company in half. Fleet management and rail makes sense for them to be bundled together. Equipment financing and aviation financing, etc. are going to be in a 2^nd segment. Trades at about 9X this year’s PE and about 7.5 for next year. Reasonably inexpensive and has a decent management team. He would stick with this for the next 12 months.

This is a really good company. It is unique and has an innovative model. Thinks the split, when it happens, will be successful from an investor standpoint. Financials have struggled in general and the backdrop isn’t great with the low interest rate environment.

It has been a very well performing stock over time. The market has turned against anything that is growth by acquisition. They have stayed up over time. They build up their earnings power. They are splitting the company into two parts. He thinks the market will like this. He thinks you will get a higher price to book over the next year. This is more of an opportunity than not.

(A Top Pick April 7/15. Down 11.19%.) A commercial leasing company, and are just in the throes of splitting up into 2 companies over the coming year. Really well run by a seasoned management team. Cheap, trading at 7X 2017 earnings.

(Market Call Minute.) Has a lot of legs, and the street is really punishing them for no good reason.

This has taken over GE’s fleet business and is going to split into 2 companies. It is going to be very interesting, but that is all in the market right now. You would not have done well in the past betting against Steve Hudson. Technically it seems to be trading in a downtrend. It needs something of a turnaround. Thinks it will be under pressure for the next little while.

Announced they are splitting into 2. He is more positive on the leasing side, which will be the lion share of the split. Leasing is a very well-run business with a lot of opportunities in terms of acquiring and adding on services. They now pay a dividend. He is doing work on how the split will take place, so it is a bit of a wait and see.

(Market Call Minute.) Staying on the sidelines right now. There is too much dependence on the financial markets for funding. Splitting the company into 2 pieces could be interesting. Thinks this is a high risk.

(A Top Pick April 16/15. Down 22.92%.) One reason he really likes this is that the leasing business is almost all in the US. Banks and other organizations are getting out of this business, so there is a great opportunity for them to grow. Made the purchase of General Electric’s (GE-N) leasing businesses. They are being split into 2 companies, which will give you the choice of owning the fleet business or the leasing side, and he would own the fleet part. Good management. They will grow through acquisitions along with organic growth. Still a Buy.

Had dipped inexplicably to $12 a while ago. A leasing business, 90% non-Canadian. They were big buyers from General Electric (GE-N). They have railcars, helicopters and leasing. Have split into commercial and industrial sides. Valuation now is under 10X earnings, which he doesn’t quite understand. If you were to get a 15 multiple on the number they say they can reach, you could see $25. He would be happy if it could get halfway there. Thinks it gets back to $20 by the end of the year. Dividend yield of 0.68%.

They are separating into fleet management and the commercial, asset backed part. They feel the fleet management portion is the more stable business and should garner more value. It should complete by the end of year and she has not got much detail. They have to focus on growing organically, rather than continuation by acquisition.

Chart shows the stock broke out in early 2015, and then kind of rounded over. That is a bit of a negative. Right now it is testing the old neckline at the previous support level. Wouldn’t buy the stock unless it broke through that support level.

A leasing company. Recently announced they are going to split into 2 parts. One part will be fleet financing and the other will be commercial. One will be steadier and the other will be higher growth. The company is reasonably leveraged to the economic cycle, so you have to have some confidence. The majority of their exposure is to the US. Thinks there will probably be good upside in this if their execution is right. He is ambivalent about it, but if management is right there should be good upside.

This just got too over-owned. There were a bunch in the US that just piled into the name. We are still seeing the effects as they are still Selling their holdings. Also, there are recession fears, and companies like this don’t do well in recessions. Split their fleet management business and vendor financing into 2 publicly traded companies in order to create value. This will lower their financing costs which is a massive margin boost for the business.