In short: A mailbag hold-or-sell question on a stock up 40% in a year. His answer separates quality from price completely: "they own dealership of Caterpillar. Indeed. And they have another division where people are very excited. They're selling — I don't even know exactly what they're selling — but due to the AI companies. And the multiple of Toromont has expanded quite a bit. Balance sheet is great. There might even be net cash or around zero debt anyway. So it's a great company. I just find it's too expensive. So me personally, we don't own it." Then the unusual disclosure that makes the row Neutral rather than Negative: "I'll reveal that we're not short it either, because that side of AI people are very excited and I think it's a great company. It's extremely well managed, and one day also you might wake up where they make another acquisition, because they've been talking about making acquisitions for quite a while." After the pullback: "No, still too expensive for me."
Toromont is the Caterpillar dealer for much of eastern Canada, plus a second division that has become popular because it sells into AI-related construction. The stock is up 40% in a year and the question put to him was hold or sell.
His answer separates business quality from share price completely, which is a useful habit. The company is excellent — "extremely well managed," a great balance sheet with roughly no net debt or possibly net cash, and management has been talking about acquisitions for a while, so a deal could arrive any morning. He simply will not pay the current multiple: "I just find it's too expensive. So me personally, we don't own it." After a subsequent pullback, still no: "still too expensive for me."
The volunteered detail is what makes this Neutral rather than Negative, and it is a discipline worth copying: "I'll reveal that we're not short it either." Expensive is not the same as shortable. A quality company with excited buyers and an acquisition pipeline is a dangerous thing to bet against, however rich the price.
31:12They're selling — I don't even know exactly what they're selling — but due to the AI companies. And the multiple of Toromont has expanded quite a bit. Balance sheet is great. There might even be net cash or around zero debt anyway. So it's a great company. I just find it's too expensive. So me personally, we don't own it. — I'll reveal that we're not short it either,
In short: Pro pick #2, held 3 yrs. The largest publicly traded Caterpillar dealer — embedded in the fiscal build-out ("either Caterpillar or John Deere on every site"). Its AVL Manufacturing deal builds AI-datacenter backup-power modules. Now in the "good problem bucket" — high expectations/multiple.
Toromont is the biggest publicly traded dealer of Caterpillar heavy equipment in Canada — think the company that sells and services the machines on every road and construction site in eastern Canada. That makes it a direct beneficiary of the government infrastructure-spending boom without having to bet on any one manufacturer. He'd rather own the dealer than Caterpillar itself. A recent deal for AVL Manufacturing added a fast-growing line making the enclosures for backup power at AI data centers — so it's now a fiscal play and an AI play. His only caution: after a strong run, expectations and the valuation are high, leaving less room for error.
57:49One way you want to play that is Toromont which is Canadian. It sells Caterpillar
57:57equipment. So talk to me about that business and why you wouldn't just buy Caterpillar. So we've
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