It’s tough to choose a single stock that you’d be willing to hold forever or for at least 25-30 years. Indeed, a lot can change in just a year, let alone a few decades. That’s why investors looking for a semi-permanent holding for their TFSA (Tax-Free Savings Account), RRSP (Registered Retirement Savings Plan), or non-registered brokerage account have got to ensure they’re picking up shares of a firm that has an incredibly wide economic moat. Indeed, wide moats can protect against many disruptive forces that can come from outside of left field.
Indeed, in today’s climate, artificial intelligence (AI) is a disruptive technology that could change how various businesses are carried out. And while automation and all the sort can be a disruptive force, certain industries stand to benefit significantly from the cost savings. In this piece, we’ll look at one firm in the retail scene that can benefit from the rise of AI as it leverages the technology to remove a bit of friction from the checkout counter.
Do remember that even the widest moat in the world can be chipped narrowed with time if management doesn’t continue to invest in growth or discounts the power of potential industry disruptors.
In any case, the following firm, I believe, has one of the best management teams on Earth, with a hunger to keep pursuing opportunities within the space, whether we’re talking about mergers and acquisition (M&A) or experimenting with new technologies to improve operational efficiencies and drive sales a bit higher. All of this bodes well for the moat width in 2025 and beyond.
Couche-Tard: A well-run retail firm worth owning for decades
Without further ado, enter shares of Quebec-base convenience retailer Alimentation Couche-Tard (TSX:ATD), a company whose high-quality shares I’d be more willing to hang for the long haul. It’s a proven long-term grower with an exceptional management team that’s not afraid to make big splashes if there are synergies to be made. Indeed, it’s quite rare to find a company whose top bosses are this focused on the extremely long term. Sure, some firms may think quarter to quarter or year to year, but Couche-Tard and a select range of other firms playing the long game seem to be positioning with the next decade (and beyond) in mind.
Of course, not every investor cares too much for such a time horizon. Either way, Couche-Tard offered up a five-year plan for such investors to get behind just a few years ago. We’re around two years into that plan, and with the 7-Eleven deal up in the air, questions linger as to whether the firm can achieve its ambitious milestone of hitting $10 billion worth of earnings before interest, taxes, depreciation, and amortization by 2028. Recession or not, I think Couche-Tard will end up surpassing such targets. At the end of the day, it’s a wonderful company that deserves the trust and patience of shareholders.
As the firm embraces AI and analytics to help improve inventory management, smarter checkout, and data-driven moves, I wouldn’t dare bet against the stock. It’s a long-term AI winner, even though it may seem like a boring retail stock that doesn’t have a lot of exciting news (other than the 7-Eleven pursuit) to get behind.
Bottom line
With the firm coming off a strong quarter, I’d not be afraid to pick up shares as they recover after a lost 2024 of returns. The company has its eye on the prize, and its continued persistence could lead to a historic deal and a return to new highs for the stock at some point this year.
