In my opinion, perhaps one of the best value options on the TSX has to be Alimentation Couche-Tard (TSX:ATD.B). This company is now trading at one of the lowest valuation multiples I’ve seen in recent years, due primarily to bearishness over consumer spending in the wake of a global pandemic that has seen driving volumes down. Gas stations and convenience stores, the company’s core businesses, have actually shown robustness with top and bottom line results of late, despite significant anticipated weakness.
This can be a result of the efforts the company’s excellent management team have made to improve the customer experience at its stores, and could also be the result of increased long-distance travelling in lieu of airline travel as folks choose to gas up and stop for snacks along the way for a trip for thanksgiving (or Christmas coming up). The pandemic could actually provide a bullish thesis for owning stocks like this that provide alternative goods to those looking to spend their money in a pandemic.
Couche-Tard’s fundamentals remain strong, and there is sufficient room for this company to make additional acquisitions to grow; with the pandemic having hurt many of the company’s competition, many analysts have expected a pickup in M&A activity in this sector in the near-term, with buyers being the likely winners here. I like everything about Couche-Tard, and would highly recommend value-oriented investors consider this stock at these levels.
Invest wisely, my friends.
