Topic: How To Invest

Spinoffs, Takeovers and Special Situations Hotline – Friday, June 22, 2018

Article Excerpt

AUTOCANADA INC., $17.15, symbol ACQ on Toronto, owns and operates 68 car and truck franchised dealerships across Canada and Illinois. On June 11, 2018, activist investor Clearwater Capital Management wrote AutoCanada’s board of directors raising concerns about the company’s profitability. Clearwater also suggesting it should explore the possibility of a sale. A week later, AutoCanada announced that it had formed a special committee of the board based on Clearwater’s request to explore its strategic alternatives. This could include soliciting offers for the company. In the quarter ended March 31, 2018, AutoCanada’s revenue decreased 2.9%, to $620.5 million from $639.0 million a year earlier. Revenue fell as a result of fewer new cars being sold as well as lower sales from parts and service. Earnings in the latest quarter, before one-time items, increased by 5.0%, to $4.8 million, or $0.18 a share, from $4.6 million, or $0.17. The gain was mostly due to lower operating expenses. OUR RECOMMENDATION: AutoCanada Inc. is okay to hold.   HONEYWELL INTERNATIONAL INC.,…