Parkland Fuel Corp (PKI.TO)

Did some acquisitions over the last couple of years, which the market initially liked. Then the market turned negative on the prospect for retail fuel, and the stock received a really negative sentiment wave which was completely unnecessary. They also bought a refinery which the market didn’t like. A pretty disciplined company. He’s been watching them for some time. Has a good dividend yield and now it is a good time to be looking at this.

He owns the bonds, which are paying roughly 6%. Prefers Alimentation Couch-Tard (ATD.A-T) which has a much lower debt profile.

He started purchasing about 2.5 months ago. It is a mini ATD.B-T. It had come off for no apparent reason. They have some very good growth ahead of them and he started buying it early. It is not cheap but they have very good growth over the next few years. They will probably raise the dividend. People are unsure of the impact of a refinery that they had to take over. Will they be able to get it up and running? They are going to use most of the people that used to run it, so it should go okay.

Thinks this company will be increasing their dividend annually for the next 10 years. He really likes this and their business model. It is kind of being ignored, because it is not a big weight in the index.

He likes this, but was in at much lower levels. They recently made 2 fairly large acquisitions. They've been very smart acquirers over the years, and have really added to their base of earnings. Well positioned in their markets. Prefers buying at $25 or under. The yield is over 4%.

Starting to look quite cheap. The cash flow profile going forward, from 2019 onward, should look fantastic. Just made a large acquisition, which came with a refinery in British Columbia. That will require a lot of capital in a turnaround early next year. The free cash flow profile doesn’t look particularly good for 2018, but beyond that it should look quite good. Refining margins in BC are at record spreads. They should be making a lot of money at the moment. A decent, steady business. Not a bad name to own. Dividend yield of 4.6%.

A consolidator in gas stations, mostly in Canada, but is more diverse than just gas stations, having propane distribution and wholesale fuels. Earlier this year, they made 2 major acquisitions; the Canadian assets of Ultramar which gives them a lot more gas stations in eastern Canada and Chevron operations in Canada which were largely in BC as well as a refinery in BC. Took on a lot of debt to do this. The refinery has a big maintenance schedule ahead of it, and investors are a little nervous as to whether they can pull off these 2 big acquisitions at the same time. Their history has shown they’ve been very good acquirers.

Since their acquisition and their deal with ATD.B-T, when it got below $25 it seemed pretty interesting. He owns the corporate bond which pays quite well. The acquisition is an accretive deal.

Everyone is doing the same thing and waiting to see what gets sold. He is not in the sector. This has been a pretty good sector and they have managed the company pretty well. You have to see what they are going to lighten up on and what they are going to add to.

Doesn’t know why it’s down, but looks like a pretty good entry point. Made an acquisition earlier in the year, buying assets from Alimentation Couche-Tard (ATD.B-T). It might be a misunderstanding of being affected by lower energy prices, which they are not. It is down to an attractive level. He owns the bonds.

It has been quite weak. There has been sector rotation and concern about refinery margins. They have done nothing wrong. They made a good acquisition.

A gas station operator. They recently bought odds and end of CST brands. They struck a sweetheart deal on assets that ATD.B-T has to cast off because of competition bureau reasons. PKI-T is quite expensive compared to their profitability.

Recently weakened following its 2 major acquisitions. A growth by acquisition company. Recently acquired Ultramar in eastern Canada and Chevron’s Canadian refinery and gas station business in Western Canada. It has become a “show me” stock, and is a great, long term buying opportunity. Dividend yield of 4.4%.

This has been growing over the last few years. He has it on his radar screen.

It did quite well and came off more recently because of the whole energy space. They also made significant acquisitions and they have to get through that. They increased the dividend over time. He is watching it and if it went down further he would be interested in buying it.