TSX:ACQ

Stock Analysis Report

Executive Summary

AutoCanada Inc., through its subsidiaries, operates franchised automobile dealerships in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, and New Brunswick.

Rewards

Trading at 10.6% below its fair value

Earnings are forecast to grow 187.66% per year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 3.68% is not well covered by earnings

Highly volatile share price over past 3 months



Snowflake Analysis

Fair value with moderate growth potential.

Share Price & News

How has AutoCanada's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ACQ's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-0.7%

ACQ

0.8%

CA Specialty Retail

1.6%

CA Market


1 Year Return

-0.4%

ACQ

-8.2%

CA Specialty Retail

9.9%

CA Market

Return vs Industry: ACQ exceeded the Canadian Specialty Retail industry which returned -9.4% over the past year.

Return vs Market: ACQ underperformed the Canadian Market which returned 10.4% over the past year.


Shareholder returns

ACQIndustryMarket
7 Day-0.7%0.8%1.6%
30 Day-15.7%0.4%2.9%
90 Day35.4%1.0%6.4%
1 Year3.3%-0.4%-5.2%-8.2%13.5%9.9%
3 Year-52.2%-56.0%-20.9%-27.3%17.4%6.7%
5 Year-66.5%-71.0%-22.1%-32.8%36.5%16.4%

Price Volatility Vs. Market

How volatile is AutoCanada's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is AutoCanada undervalued compared to its fair value and its price relative to the market?

43.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ACQ (CA$10.87) is trading below our estimate of fair value (CA$12.16)

Significantly Below Fair Value: ACQ is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ACQ is unprofitable, so we can't compare its PE Ratio to the Specialty Retail industry average.

PE vs Market: ACQ is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate ACQ's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: ACQ is good value based on its PB Ratio (0.8x) compared to the CA Specialty Retail industry average (1.4x).


Next Steps

Future Growth

How is AutoCanada forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

187.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ACQ is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.4%).

Earnings vs Market: ACQ is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: ACQ's is expected to become profitable in the next 3 years.

Revenue vs Market: ACQ's revenue (4.1% per year) is forecast to grow slower than the Canadian market (5% per year).

High Growth Revenue: ACQ's revenue (4.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if ACQ's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has AutoCanada performed over the past 5 years?

-53.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ACQ is currently unprofitable.

Growing Profit Margin: ACQ is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: ACQ is unprofitable, and losses have increased over the past 5 years at a rate of -53.7% per year.

Accelerating Growth: Unable to compare ACQ's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: ACQ is unprofitable, making it difficult to compare its past year earnings growth to the Specialty Retail industry (-10.5%).


Return on Equity

High ROE: ACQ has a negative Return on Equity (-9.65%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is AutoCanada's financial position?


Financial Position Analysis

Short Term Liabilities: ACQ's short term assets (CA$1.1B) exceed its short term liabilities (CA$1.0B).

Long Term Liabilities: ACQ's short term assets (CA$1.1B) exceed its long term liabilities (CA$612.7M).


Debt to Equity History and Analysis

Debt Level: ACQ's debt to equity ratio (258.5%) is considered high.

Reducing Debt: ACQ's debt to equity ratio has increased from 138.8% to 258.5% over the past 5 years.

Debt Coverage: ACQ's debt is not well covered by operating cash flow (3.4%).

Interest Coverage: ACQ is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet

Inventory Level: ACQ has a high level of physical assets or inventory.

Debt Coverage by Assets: ACQ's debt is covered by short term assets (assets are 1.1x debt).


Next Steps

Dividend

What is AutoCanada's current dividend yield, its reliability and sustainability?

3.60%

Current Dividend Yield


Dividend Yield vs Market

company3.6%marketbottom25%1.9%markettop25%5.4%industryaverage3.8%forecastin3Years3.6%

Current dividend yield vs market & industry

Notable Dividend: ACQ's dividend (3.68%) is higher than the bottom 25% of dividend payers in the Canadian market (1.88%).

High Dividend: ACQ's dividend (3.68%) is low compared to the top 25% of dividend payers in the Canadian market (5.48%).


Stability and Growth of Payments

Stable Dividend: ACQ's dividend payments have been volatile in the past 10 years.

Growing Dividend: ACQ's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: ACQ is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: ACQ's dividends in 3 years are forecast to be well covered by earnings (27.4% payout ratio).


Next Steps

Management

What is the CEO of AutoCanada's salary, the management and board of directors tenure and is there insider trading?

1.3yrs

Average management tenure


CEO

AutoCanada has no CEO, or we have no data on them.


Management Age and Tenure

1.3yrs

Average Tenure

51yo

Average Age

Experienced Management: ACQ's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Age and Tenure

1.4yrs

Average Tenure

61yo

Average Age

Experienced Board: ACQ's board of directors are not considered experienced ( 1.4 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$97,23916 Aug 19
Dennis DesRosiers
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceCA$9.72
SellCA$343,50020 Mar 19
Raj Juneja
EntityIndividual
Shares30,000
Max PriceCA$11.45

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Peter Hong

    Chief Strategy Officer & General Counsel

    • Tenure: 1.3yrs
    • Compensation: CA$2.38m
  • Mike Borys (57yo)

    Chief Financial Officer

    • Tenure: 0.4yrs
  • Erin Oor

    VP of Corporate Development & Administration and Corporate Secretary

    • Tenure: 5yrs
    • Compensation: CA$566.92k
  • Paul Antony (51yo)

    Executive Chairman

    • Tenure: 1.6yrs
    • Compensation: CA$3.06m
  • Tamara Darvish

    President of U.S. Operations

    • Tenure: 0.8yrs
  • Michael Rawluk (45yo)

    President & Director

    • Tenure: 1.4yrs
    • Compensation: CA$3.01m
  • Kevin McPherson

    Director of Finance

    • Devon Wilson

      Director of Treasury

      • Angela Merriott

        Vice President of Human Resources


        Board Members

        • Maryann Keller (75yo)

          Lead Independent Director

          • Tenure: 1.4yrs
          • Compensation: CA$127.00k
        • Steve Green (66yo)

          Director

          • Tenure: 1.4yrs
          • Compensation: CA$49.90k
        • Dennis DesRosiers (68yo)

          Independent Director

          • Tenure: 12.7yrs
          • Compensation: CA$122.50k
        • Paul Antony (51yo)

          Executive Chairman

          • Tenure: 1.6yrs
          • Compensation: CA$3.06m
        • Barry James (61yo)

          Independent Director

          • Tenure: 5.2yrs
          • Compensation: CA$149.50k
        • Elias Olmeta (51yo)

          Director

          • Tenure: 1.4yrs
          • Compensation: CA$49.90k
        • Michael Rawluk (45yo)

          President & Director

          • Tenure: 1.4yrs
          • Compensation: CA$3.01m

        Company Information

        AutoCanada Inc.'s company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: AutoCanada Inc.
        • Ticker: ACQ
        • Exchange: TSX
        • Founded: 2009
        • Industry: Automotive Retail
        • Sector: Retail
        • Market Cap: CA$304.352m
        • Shares outstanding: 27.42m
        • Website: https://www.autocan.ca

        Number of Employees


        Location

        • AutoCanada Inc.
        • 200-15511 123 Avenue NW
        • Edmonton
        • Alberta
        • T5V 0C3
        • Canada

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        ACQTSX (The Toronto Stock Exchange)YesClass A Common SharesCACADMay 2006
        AOCI.FOTCPK (Pink Sheets LLC)YesClass A Common SharesUSUSDMay 2006
        31KDB (Deutsche Boerse AG)YesClass A Common SharesDEEURMay 2006

        Biography

        AutoCanada Inc., through its subsidiaries, operates franchised automobile dealerships in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, and New Brunswick. The company offers a range of automotive products and services, including new and used vehicles, vehicle leasing, vehicle parts, vehicle maintenance and collision repair services, extended service contracts, vehicle protection products, and other after-market products. It also arranges financing and insurance for vehicle purchases by its customers through third-party finance and insurance sources. The company sells its vehicles under the Chrysler, Dodge, Jeep, Ram, Alfa Romeo, Fiat, Chevrolet, GMC, Buick, Cadillac, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi, Volkswagen, Kia, Mazda, Mercedes-Benz, BMW, MINI, and other brands. As of December 31, 2018, it operated 68 dealerships, representing 77 franchises in Canada, as well as in Illinois, the United States. AutoCanada Inc. has a strategic partnership with DealerMine Inc. AutoCanada Inc. was incorporated in 2009 and is headquartered in Edmonton, Canada. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/18 00:13
        End of Day Share Price2020/01/17 00:00
        Earnings2019/09/30
        Annual Earnings2018/12/31


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.