In our last Number Cruncher, we covered Alimentation Couche-tard, Lassonde Industries and Metro. We will go into more detail about these titles with our software.
Let’s start with Alimentation Couche-Tard:
The company is solid despite its decrease in last year-over-year sales due to the decrease in gasoline sales. The increase in sales occurs organically, but also by acquisition, which explains its strong growth. The performance spread is also declining, but we will look at it more in detail and see why it is not a problem.
We see that the company has some volatility in its return on capital and that 2015 was a strong year. Although the software shows a decrease in the performance spread, we don’t think this is a cause for concern.
Lassonde had a good quarter and paves the way for a strong year thanks to the pandemic, which is causing consumers to spend more at the grocery store. The company has been able to generate double digits growth in earnings per share despite low single digits sales growth.
When looking at the Future growth value (FGV) of the company, one notices that the company is severely evaluated by the market. The FGV represents the growth portion of the company that an investor buys. In this case, the FGV is negative, so the investor would buy the company at a discount compared to its current activities. The market considers that the company will have a decrease in its growth in the coming years which may not be justified.
Metro has a very high score in our system. In fact, it is the Canadian company with the second highest score across all sectors. The average profit growth of 42% is certainly a reason. The risk is perceived as very low by our software. A large part of this risk is associated with evaluation, so according to our system Metro is cheap when compared to its previous performance.
Looking at the comparables, the company stands out by being the highest value for the Y-axis, which means that it is the best performer. Moreover, it is in the right-hand quadrant, which means that it is relatively inexpensive. GB is a micro cap of $3M and doesn’t have the stability of Metro.
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