The Motley Fool

Buy Alert: The #1 Travel TSX Stock You Should Buy Today

Image source: Getty Images

Much ado has been made over the stress the travel and tourism sector has seen  and likely will continue to see as a result of the COVID-19 pandemic. This investor scrutiny is certainly warranted. I remain very bearish on the 12- to 24- month outlook for the sector in general. Airlines in particular will continue to struggle until the day these critically important businesses can prove their supply and demand fundamentals are back on track.

Over the next year or two, I would therefore encourage investors seeking a sneaky way to play an early rebound on travel to look at companies like Alimentation Couche-Tard (TSX:ATD.B). My thesis is simple: if travellers aren’t flying, we can certainly expect a heck of a lot more road trips on the horizon.


Alimentation Couche-Tard is a Québec-based global conglomerate of convenience store and gas station chains. The company has thousands of locations spanning most continents (almost Australia, will get to that). Couche-Tard has found a wonderful niche in acquiring, updating, and operating these businesses and efficient and streamlined way.

The sector is a fragmented one. However, Couche-Tard has done an incredible job of creating synergies with its acquisitions. The company has become one of the largest and well respected players in this business globally.

Couche-Tard’s attention to the customer experience has allowed the company to have among the best sales per square foot and other key operating metrics in the industry. Furthermore, the company’s business model is uniquely positioned to take advantage of an upcoming resurgence in customer travel demand via automobile.

The 10 Best Stocks to Buy This Month

Click here to learn more!

Business model based on travel resurgence via road trips

Airlines will continue to sputter in the coming months. Also, travellers will postpone their jet setting lifestyles or dream vacations in favour of a weekend getaway. Gas stations and convenience stores become obvious beneficiaries of such a rebound in demand.

Couche-Tard’s growth based acquisition model appears to be grounded for the time being. This is a good thing for investors who may be concerned about balance sheet integrity today. Couche-Tard’s management team has continued to look for and assess deals.

However, they made the recent decision to forgo a transaction with Caltex Australia. This acquisition would have brought billions more in debt to the company’s balance sheet. Therefore, it appears a slower and steady approach has become the goal for the company’s management team.

Bottom line

As far as high-quality options to play a Covid-19 rebound go, Alimentation Couche-Tard remains one of my top picks. I believe this company is likely to see a shorter, sharper recovery.

I expect Couche-Tard to blow away expectations in the coming quarter. Further, I believe the stock market to appreciate the likelihood of this much sooner. Couche-Tard has not traded at the those attractive valuations during the previous bull market, which makes this stock a buying opportunity in the near term.

I’m going to be monitoring the stock over the coming weeks and will consider taking a position should we see any significant stock price declines from these levels.

The 10 Best Stocks to Buy This Month

Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.

Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.

Click Here to Learn More Today!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends ALIMENTATION COUCHE-TARD INC.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.