Transcontinental (TCL.A) is a communications company that primarily operates in printing, packaging and media businesses. The company is the largest commercial printer in Canada and the fourth largest in North America. Following its acquisition of Coveris, Transcontinental is among the top ten flexible packaging companies in North America. (RBC Insight)
Watchlist: Tier 1
Sector: Consumer Discretionary
Market Cap: 1.45B
Credit Rating: BBB-
Debt/Cap ratio: 39%
Balance Sheet (Total Assets to Liabilities in millions)
Morningstar monthly pick?: No Star rating: 4 stars
My take: Transcontinental is in a transitional stage. It recently completed a large acquisition of Coveris, and is in the process of working out kinks. Transcontinental has experienced 6.8% earnings growth over the past 20 years and increased dividends on average 13.5% in that time, without any cuts. The current challenge for management is a learning curve in an unfamiliar industry. It remains to be seen whether management can tap-in to a lucrative packaging market by generating profits and growth to justify the acquisition.
Socratic Disclaimer: For all this, I truly know nothing. Every investment decision I make is based on the best available data at the time. Investing is speculative by nature. Sometimes I will take greater risks and make decisions that you, the reader, vehemently disagrees with. This is the nature of my investment philosophy; play it safe, mostly. At the end of the day, no one knows how companies, the market, or life in general will play out. Countless companies have gone from boom to bust for various reasons: Enron, GE, Blackberry, Maxar… the list goes on. I am not here to tell you what to do with your money. I am here to share my experience and learning with you in hopes that you become a more knowledgeable and inspired investor. Best of luck.