mardi 23 février 2021

Why I sold my Couche-Tard shares

Today, I finally sold all my Couche-Tard shares.

It took me many weeks to sell because I've loved Couche-Tard for years. I still think that it's a good company. Probably not great anymore, but still good.

Sadly, Couche-Tard had changed: Fuel selling wasn't as trendy as before. Buying other convenience stores wasn't even that appaling for Couche-Tard. They thought about diversification through Dollar Stores instead. Which was a big source of ?????  for me.

Why should I stay with Couche-Tard if that company thinks that Dollar Stores is the place to be? Why shouldn't I sell my Couche-Tard shares to buy Dollarama or Dollar General instead? And what about the future of fuel? What about electric stations? Couche-Tard would maybe adapt it's model, but maybe not. A changing industry is not the easiest place to be. You may believe in the company, but the fog is thicker than before. And I don't like fog. I prefer to pay more for less fog (whatever Buffett says about overpaying for a cloudless sky. Yeah, that’s probably why he didn’t buy anything in March 2020).

That's mostly why I sold Couche-Tard. 

Some years ago, I wrote a post about my "permanent holdings". 

Couche-Tard was among that list. Yeah, "permanent" my ass. Most of the stocks listed on that post have been sold. 

9 commentaires:

  1. Interesting that you linked that post about permanent holdings from 5 years ago.

    Of all the stocks that I listed, I only sold UNP. It was more that I wanted some cash to buy another position and UNP was one of my smallest position.

  2. Tricky name, lots to like here but structural headwinds are unlikely to abate. That being said, I wouldn't underestimate the operational and capital allocations skills of this management team. If you give great managers ~$2.5B in annual FCF, a clean balance sheet, and fragmented industry conditions, good things tend to happen over the long-term. Even if FCF levels remain constant (very conservative assumption) this company will be able to generate its entire market cap (~US$32B) in FCF (cumulatively) within the next decade so one shouldn't overlook the earnings power here.

  3. What did you buy with the proceeds?

  4. You will probably be told to leave Quebec due to your unpatriotic portfolio choices.

    1. I’m currently more exposed to Ontario’s economy than Quebec. I should live there. We can smoke marijuana on the streets there (not here).

  5. I wonder why paying at the pump didn't kill Sleep Late?

  6. Gas and cigarettes...yay. Well, they do have some kind of deal with the cannabis retailer, Fire & Flower.

  7. Keeping the faith for now! I even increased my position bolow $38 even if it was my top 2 stock...

  8. Maybe I purchased some of you shares? 😉