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Alimentation Couche-Tard: A Canadian Compounder With Plenty Left In The Tank

Mar. 10, 2020 12:28 PM ETAlimentation Couche-Tard Inc. (ANCUF)6 Comments
Lukas Wolgram profile picture
Lukas Wolgram


  • Alimentation Couche-Tard has been a 100 bagger over the last two decades, but the company isn't done growing yet.
  • The company and management's strong track record give the company invaluable experience and a competitive advantage over competitors.
  • Alimentation Couche-Tard is getting into electric charging stations, building a solid moat for the eventual electrification of global transportation.
  • The valuation is currently near historical levels that should serve shareholders well going forward.


Alimentation Couche-Tarde (OTCPK:ANCUF) is a Canadian based operator of convenience stores and gas stations around the world. The company has intelligently used debt to make many significant acquisitions, propelling the stock to the rare, yet coveted, 100 bagger status over the last 20 years. Management has done extremely well compounding the company's profits and shareholder returns, especially considering the company operates in a fairly low growth industry.

And yet, the company continues to trade at very reasonable multiples. This has not been a story of multiple expansion, leaving shareholders in a position to capitalize on further value creation that the company can now take advantage of due to its leading market position and experience.

Data by YCharts

Where The Company Sits Today

Alimentation Couch-Tard has put up some of the best shareholder returns in the stock market through a combination of organic sales growth and astute acquisitions. The company now operates or licenses over 16,100 stores, mostly across North America and Europe, although nearly 2300 stores exist in other markets as well.

Source: October 2019 Investor Presentation

The company utilizes a strategy of taking on debt to finance acquisitions that can then provide cash flow to be used to pay back down the debt and reduce leverage over time. Once leverage gets to relatively low levels, the company once again looks for larger acquisition. Management has successfully avoided the trap of paying too much just to increase store count, something too many public companies tend to fall into. I expect this company to continue using this strategy going forward for the foreseeable future. Thus if you don't like debt, this may not be the stock for you. On the other hand, savvy investors will realize that debt benefits the company greatly when used properly and is what will allow this company to continue expanding in the future. Shareholders are

This article was written by

Lukas Wolgram profile picture
Check out my FREE substack newsletter Uncommon Profits here: https://lukewolgram.substack.com . Ranked #1 on Tip Ranks top 25 financial bloggers for accuracy as of January 1, 2021. I focus mostly on high quality small and microcap companies that I believe can double their stock price within 3 years (26% hurdle rate).

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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