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Shares of vehicle seller and repair company AutoCanada Inc. (ACQ-T) continue to accelerate amid growing demand for automobiles, including from some consumers nervous about using public transit due to the pandemic.

The Edmonton-based company’s stock is up about 20 per cent so far this year and has soared by about 160 per cent over the past year. Analysts say shares of the company, which sells new and used vehicles and parts and repair services across North America, are benefitting from consumer demand as well as operational improvements and a move into digital services.

AutoCanada’s stock reached $30.65 on Nov. 18, its highest level in more than five years, days after reporting it had exceeded $1-billion in sales in the third quarter, a first for the company for a single quarter. It was a dramatic recovery from its price of $4.60 in March, the stock’s lowest level in about a decade. The stock was hit hard, alongside the broader markets, when the pandemic first hit North America and caused widespread business closures and lockdowns. The stock has since recovered as the economy steadily reopens. Many people are also using their cars more to travel close to home as lockdown and air travel restrictions remain.

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AutoCanada says it operates 66 franchised dealerships that include 27 vehicle brands in eight provinces in Canada as well as a group in Illinois.

ATB Financial analyst Chris Murray says industry data shows sales for both new and used vehicles were “flat to up,” in December and AutoCanada management said at an ATB Capital Markets Institutional Investor conference this week that the company continues to outperform the broader market on volumes.

“In 2021, once we get through lockdowns, particularly in Quebec, Ontario and Alberta we are seeing demand accelerate, not only from traditional buyers but also from new buyers who may have previously used alternative transportation methods including ride-sharing and public transit,” Mr. Murray said in an e-mail to the Globe. He has an “outperform” (similar to buy) and $32 target on the stock.

Coupled with the operational improvements (and coincident improvement in the company’s leverage position) we are anticipating a more robust level of M&A [merger and acquisition] activity in 2021,” Mr. Murray added. The company’s latest deal was announced in Dec., when it said it had acquired Haldimand Motors, an independent used vehicle dealership located in Cayuga, Ont. near Hamilton.

Mr. Murray says investors are also watching the company’s move to build a fully digital platform, which he says would be a first for Canada “along the lines of what we have seen in the U.S. among retailers like CarMax, Carvanna and Vroom — which could again create a significant opportunity.”

He notes AutoCanada’s executive chairman Paul Antony has “deep roots in technology” given his previous build-out of Carproof, a data and software company, a few years ago.

Canaccord Genuity analysts Luke Hannan and Derek Dley named AutoCanada as a top pick in December, with a “buy” rating and $32 price target. They noted the stock more than doubled in 2020, while the S&P/TSX Consumer Discretionary index increased by about 13 per cent.

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“Following seven consecutive quarters of outperformance in the Canadian new vehicle market, combined with five consecutive quarters of improvement in the company’s U.S. operations and a significantly improved balance sheet relative to the end of 2018, we believe AutoCanada is poised for a banner 2021, marked by both organic and acquisitive growth,” the analysts wrote.

AutoCanada’s revenue was just over $1-billion for the third quarter ended Sept. 30, which was in line with expectations and compared to $981.9-million in the prior year. Analysts are expecting revenue of $869-million in the fourth quarter up from $809.1-million a year ago.

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