Thursday’s TSX breakouts: 11 buys on this stellar-performing stock

Today, there are 24 stocks on the positive breakouts list, while the list of negative breakouts is at 14. The strengthening price of oil, rising above the $43 (U.S.) mark and increasing 6.6 per cent for the first three trading days of this week due to geopolitical concerns, gave a lift to energy stocks resulting in a dramatic decline in the number of stocks on the negative breakout list.

Today, a multi-year stellar performing stock surfaced on the positive breakouts list, that stock is Alimentation Couche-Tard (ATD.B-T). Couche-Tard is a leading convenience store operator with stores in Canada, the United States, and Europe operating under banners such as Couche-Tard, Mac's, Circle K, and Statoil. As of October 11, the company had 6,579 stores in North America and 2,217 stores in Europe.

On Nov. 24, the company reported solid second-quarter 2016 results and management announced an increase to the company's quarterly dividend. The company reported adjusted earnings per share of 66 cents (U.S.), up 20 per cent year-over-year. This was a penny ahead of the consensus earnings per share estimate. The strong earnings momentum was attributed to organic and acquisition growth, combined with higher fuel margins. Same-store merchandise revenues grew 5.2 per cent in the U.S., 3.6 per cent in Canada, and 3.1 per cent in Europe.

Analysts' recommendations

According to Bloomberg, there are eleven "buy" recommendations and two "hold" recommendations. Analysts' price target range from $59 to $74 with the average one-year price target at $67.81, implying a potential price return of 9 per cent.

Analysts have been revising their sales and earnings estimates higher for 2016 and 2017. The consensus earnings per share estimate is $2.15 (U.S) in 2016 and $2.34 in 2017.

Dividend policy

On November 24, management announced over a 22 per cent hike in its quarterly dividend to 6.75 cents (Canadian) per share from 5.5 cents. This equates to 27 cents per year, and an annualized yield of 0.4 per cent.

Technical analysis

Couche-Tard has been a stellar performer for investors. In 2014, the stock price appreciated 83 per cent. In 2013, the stock price rallied 63 per cent, and the stock's positive momentum remains intact. Year-to-date, the stock price up over 27 per cent and is at a record high.

There is downside support at $60, near its 50-day moving average.

Valuation

On a valuation basis, the stock is trading at a price-to-earnings multiple of 20 times the 2017 consensus earnings estimate, above its three-year historical average of 16.7 times, and relatively in-line with its one-year average of 19.6 times.

As always, I strongly encourage readers to consult a financial advisor, and to do their own proper due diligence before taking any investment action.

Below is a list of stocks in the S&P/TSX composite index and the S&P/TSX Small Cap index that are technically breaking out, reaching new 55-day highs or lows.