Couche-Tard Stock: Is Too Much Demand a Bad Thing?
The Motley Fool
Published Sep 17, 2021 15:30
Updated Sep 17, 2021 15:45
Couche-Tard Stock: Is Too Much Demand a Bad Thing?
Value investing is a go-to option for investors looking to maximize their long-term wealth. However, it is only getting harder to find reliable stocks trading below their intrinsic value. Alimentation Couche-Tard (TSX:ATD.B) is one such value stock that I’ve been pounding the table on of late. However, I think Couche-Tard stock could actually also be a great growth stock right now.
Let’s dive into what’s driving a positive growth outlook for Couche-Tard right now.
Couche-Tard stock: An interesting bet for investors Over the past six months , Couche-Tard stock has performed very well. Shares of this Canadian convenience store and gas chain operator are up approximately 20% over this time frame. Indeed, the pandemic reopening thesis remains strong with this stock.
For those less inclined to believe this reopening thesis is as strong as investors do, consider the company’s hiring troubles. Currently, Couche-Tard is having a whale of a time bringing on new employees. For a company with a whopping 14,000 stores, the HR department is likely a bit under pressure (to say the least) to fill the spots necessary to meet demand.
Couche-Tard has begun to offer sector-leading retention and hiring bonuses to please its employees. Free cell phones and other perks have recently been added to the mix.
However, it appears the demand Couche-Tard is seeing provides Couche-Tard stock with a significant risk. That is, that the company won’t be able to scale up fast enough to meet this demand.
That’s a good problem to have. However, it’s still a problem. Accordingly, whether Couche-Tard stock can grow alongside its demand remains to be seen.
Bottom line Couche-Tard’s recent earnings have highlighted just how strong demand is for this company’s products and services. The company has seen revenues and earnings surge. These have complemented impressive strength in Couche-Tard stock of late.
That said, Couche-Tard stock still remains cheap on a relative basis. This company’s valuation sits at less than 16 times earnings. Compared to the overall market, investors in Couche-Tard stock are getting a steal of a deal right now.
Given this company’s prospective growth trajectory, I think Couche-Tard stock could be one of the best, and most overlooked, stocks on the TSX right now. This is a company with a strong reopening thesis, and one I expect to continue to post impressive growth numbers in the quarters and years to come.
Accordingly, I think Couche-Tard is a company every long-term investor should consider right now.
The post Couche-Tard Stock: Is Too Much Demand a Bad Thing? appeared first on The Motley Fool Canada.
Get The App
Fool contributor Chris MacDonald has no position in any stocks mentioned. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC.
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.