2024 SOHN Conference Stock Pitches

Nikhil Daftary, NK Capital
Investment Idea: Alimentation Couche-Tard

A Canadian operator of global convenience stores is a buying opportunity in an industry that is often overlooked, according to Nikhil Daftary, co-founder and partner at NK Capital.

Alimentation Couche-Tard is listed in Canada, but makes most of its profits in the U.S, where it is the second-largest convenience store chain, behind only 7-Eleven, Daftary said. It has CA$75 billion market cap with an “unbelievable record of success,” according to the investor. What’s more, Daftary anticipates that scale gas stations will be a surprising beneficiary of the growth in electric vehicle adoption.

“We believe Couch-Tard is one of the greatest success stories in public markets priced like a value stock,” Daftary said, adding that the company has a share price to match an 18% CAGR. “We believe the company can grow EPS in mid-teens growth rate for many years to come” that can one day rival some of the world’s biggest chains, such as Starbucks and McDonalds.

“We think Couche can be one of the biggest retailers in the world one day,” he said. The stock is down 4.4% this year, losing roughly 11% over the past month after the company posted disappointing third-quarter earnings.