KeyStone’s Stock Talk Show, Episode 240. 

It’s great to be back in the New Year as we kick off a great slate of content for 2024. We will start by looking at a couple of recently released special research reports and then hit the proverbial mailbag to answer some viewer questions including a question on long-term favourite Boyd Group Services Inc. (BYD:TSX), one of North America’s largest operators of non-franchised collision repair centers. The stock has been in coverage since 2008 and a listener asks if its long-term uptrend can continue. Aaron answers a listener question on engineering firm Stantec Inc. (STN:TSX). A listener asked what drove the company’s 50% gains in 2023 and how it compares to existing engineering and construction firms we have in coverage. Brett answers a viewer question on MicroStrategy Incorporated (MSTR:NASDAQ) an analytics and business intelligence company that funnels its cashflows into holding Bitcoin which it holds 189,150 worth approximately $8.6 billion at $45,500 each at the time of recording. The shares are currently trading at $571 with a market cap of $9 billion.  The listener wants to know if MicroStrategy is a smart way to play Bitcoin. Last, and certainly least, Brennan reviews a viewer question on Ametek Inc. (AME:NYSE) which manufactures and sells electronic instruments and electromechanical devices in North America, Europe, Asia, and South America. Is it a buy, sell, or hold? Brennan has you covered.

Let’s get to the show – we welcome my cohost, Mr. Aaron Dunn and the killer B’s, Brett and Brennan.

A couple of research notes – KeyStone’s Cash Rich, Canadian Small-Cap Report – which produced 3 new Canadian Small-Cap recommended was released late in December – if you have not had a chance to look at it and are serious about adding some Canadian growth stocks with strong balance sheet to your portfolio – I say – what are you waiting for. 

Just release this past week was our Top 100 U.S. Stock report which produced 2 new U.S. large cap recommendations and included 4 Focus BUY Recommendations, 7 High Conviction Monitors, and 11 additional monitor reports as well as statistical data on all 100 companies. – Aaron do you want to speak a little bit about the report.

Boyd Group Services Inc. (BYD:TSX)

Boyd was originally recommended by KeyStone in Nov 2008 at $2.30 – today it hit all time highs at just under $280.00 – up over 12,300%

What does Boyd do?

One of North America’s largest operators of non-franchised collision repair centers. The company operates ~130 locations in Canada under the trade names Boyd Autobody & Glass and Assured Automotive, as well as ~800 sites in the US under the Gerber Collision & Glass brand, for a total of over 930 centers.

Recent Quarterly Numbers:

Additional Q3 2023 Highlights:

  • Net earnings per share increased to $0.95, compared with $0.55 in the same period of 2022.
  • Debt, net of cash before lease liabilities increased from $316.9 million at June 30, 2023 to $356.8 million at September 30, 2023
  • Added 21 collision repair locations, including 17 through acquisition and four start-up locations.


Subsequent to Quarter End

  • Added nine collision repair locations, including six through acquisition and three start-up locations.
  • Announced a dividend increase of 2.0% to $0.600 per share annualized from $0.588 per share annualized.

January 2024 Investor Presentation (released January 9th).

932 locations at year-end vs. 898 reported at Q3 2023, implying 34 new locations in Q4, well above consensus estimates.

Q4 marked the largest step-up in store count since Q3 2021.

On a full-year basis, BYD acquired approximately 80 locations in 2023, up from just 23 in the prior year.

Of note here – it appears that consolidation industry wide was down roughly 50% in 2023 (higher cost of financing impacting M&A) but Boyd actually increased its M&A opportunely by roughly 250 from 2022 levels. 

Potential to reach 5-year growth target early.

  • Boyd set a target of doubling its revenue vs. 2019 by 2025.
  • Current consensus forecasts now imply BYD will nearly reach this target in 2024 – with revenue estimates equal to between a 90-96% increase vs. 2019.
  • One larger multi-shop acquisition could put the company at the target roughly one year in advance.


BYD trades with an EV/EBITDA based on 2023 and 2024 estimates of 16.0 and 13.3x respectively.

BYD trades with a P/E based on 2023 and 2024 estimates of 54.0x and 36.7x respectively.


Our take – we believe 2024 will be another supportive year in terms of M&A for BYD and while same-store sales increases tapered from those experienced during the period following the pandemic through 2023, we expect the company can hit or exceed its 10 year average of just under 6% through 2024.

Despite the tremendous gains, we would not bet against Boyd long-term and continue to like the business.



MicroStrategy symbol MSTR on the NASDAQ is an analytics and business intelligence company. The software is designed to be used across industries from retail, healthcare, finance, or the public sector. In addition to its operations, the company funnels its cashflows into holding Bitcoin which it holds 189,150, worth approximately $8.6 billion at $45,500 each. The shares are currently trading at $571 with a market cap of $9 billion.


As the company has 2 sides to its business, its software business and the other being its Bitcoin holding we will break up the financials a bit to see how the operation is performing, but first a quick overview of the income statement.

For Q3 2023, the company had total revenues of 129 million up 3.3% from 125 million in the prior year.

Gross profit increased 2.8% to $103 million from $100 million. Operating in coming shifted to a loss of $25 million from an income of $6 million.

The company had a net loss of $143 million or $10.09 per share compared to a loss of $27 million or $2.39 a share in the prior year. Largely do to a non-cash tax expense of $110 million, which primarily relates to the removal of a previously recognized taxable benefit, and just a little look ahead bias as the Bitcoin ended Q4 above MicroStrategy’s cost basis you’ll see a large tax benefit for Q4 2023.

Now stepping back up the income statement to operating income is where we deviate to see how well the software segment is performing. We will remove digital asset impairment losses from the operating income or loss. Adjusted operating income was $8.3 million for the quarter compared to $5.3 million in the prior year. As we want to look at the income of just the software segment we’ll ignore the debt for now as it relates to the Bitcoin holdings as well as the other income which is foreign exchange gains.  At a standard 21% US tax rate the software segment would have a net income of at least $6.6 million, I say at least as there will be some expenses in SG&A related to the Bitcoin operation which I can’t pull out given the information.

If you repeat the process for the trailing twelve months you end up with a segment adjusted net income of at least $6.5 million.


Now looking at the Bitcoin holdings, at the end of Q3 2023 the company held 158,400 up from 132,500 at the end of 2022. As well since the end of the quarter the company purchased additional bitcoin putting the amount at roughly 189,150 The dollar value of the holdings is approximately $8.6 billion with an average cost basis at Q3 2023 was 31,168 which means the company is sitting on an unrealized gain of roughly $2.7 billion at the time of recording.

As I stated before, the debt the company holds is related to Bitcoin, as the specifically issued debt and shares to fund the purchase of Bitcoin.  The company holds $2.2 billion in long-term debt at the end of the quarter, so if we net it like a margin trading account the equity position of its Bitcoin holdings is roughly $6.4 billion.  The debt is comprised partially of convertible debt and partially senior secured debt against its Bitcoin holdings. Notably, the convertible debt pays only 0.75% and no normal interest for the two issuances due to the timing of issuance in late 2020 and early 2021. The senior secured debt has a coupon rate of 6.125%. The company has a weighted interest rate of only 1.6%. At this time the Bitcoin holdings are levered at roughly 1.3x.


To fund the recent round of Bitcoin purchases the company has an used at-the-market share sale method to raise $610 million. Not being the first time we can see here that the outstanding shares since 2018 have increased materially and will increase again after this last round of issuance which is not included in this graph.


Overall, Bitcoin is the real reason why one would want to invest in MicroStrategy and we can see this reflected in the stock price. The stock and Bitcoin are by no means correlated to the same degree a Bitcoin ETF is but for a company, it is highly correlated. As in all reality the company is a levered play on Bitcoin. For the listeners, if you look at a chart of Microstrategy and Bitcoin the movement of Microstrategy is close but not exact when compared to Bitcoin. That being said since the start of 2020 Bitcoin has outperformed Microstrategy, but that is a rather arbitrary starting point, so the exact performance difference changes with the time range.

Now a quick sum of parts valuation.
Like I said before Bitcoin’s value contributes of $6.4 billion of the $9.0 billion market cap. So the software segment is valued at approximately $2.6 billion. This means the P/E of my ballpark figure for the software business is nearly 400 times, meaninglessly high. For a no-to-little-growth software business. Like I said before that estimate was likely the lower end as some SG&A expense would likely be attributed to Bitcoin operations, but even if we allocated $60 million of that SG&A roughly half the PE of the software business would be around 50 times, still expensive. The exact PE would change depending on assumptions but appears to be expensive regardless given the growth of both revenue and estimated earnings.


Concluding, Microstrategy is a proxy for Bitcoin. The Software business doesn’t add the value needed to fill in the gap between its bitcoin holdings and the market cap. The biggest value added for the Bitcoin segment was the time of issuance of those two sets of convertibles at low-interest rates, past that and timing of equity issuance the company has no real avenue of adding value for its Bitcoin holding operations.

If you want exposure to Bitcoin trade on the stock exchange just buy an ETF and it will be better bang for your buck at this time, as Canada has had spot ETFs for years now and the US market just approved them.

YSOT Ametek Inc. (AME:NYSE) 

Current Price: $162.32

Market Cap: $37 Billion

Dividend Yield: 0.62%


AMETEK, Inc. manufactures and sells electronic instruments and electromechanical devices in North America, Europe, Asia, and South America.

Slide 2

It operates in two segments, Electronic Instruments (EIG) and Electromechanical (EMG).

The company’s Electronic Instruments segment offers advanced instruments for the process, aerospace, power, and industrial markets; process and analytical instruments for oil and gas, petrochemical, pharmaceutical, semiconductor, automation, and food and beverage industries; and instruments to the laboratory equipment, ultra-precision manufacturing, medical, and test and measurement markets.

Its Electromechanical segment offers engineered electrical connectors and electronics packaging to protect sensitive devices and electronics; precision motion control products for data storage, medical devices, business equipment, automation, and other applications; high-purity powdered metals, strips and foils, specialty clad metals, and metal matrix composites; motor-blower systems and heat exchangers for use in thermal management, military, commercial aircraft, and military ground vehicles; and motors for use in commercial appliances, fitness equipment, food and beverage machines, hydraulic pumps, and industrial blowers.

Slide 3

Ametek has been an aggressive acquirer, having deployed just under $7 billion on 36 acquisitions since 2014. The most recent acquisition was for Paragon Medical which provides engineered medical devices, components and instruments and was closed on December 8th for an all-cash transaction valued at approximately $1.9B with annual sales of approximately $500 million.

Slide 4

Recent Financial Results: (Q3, 2023)

  • Revenues were $1.62 billion, a 5% increase over the third quarter of 2022.
    • Organic growth was flat, but Acquisitions added 4% growth and positive FX added 1%.
  • GAAP EPS was $1.48 per share, up 13.8% Y/Y and Adjusted EPS was $1.64 per share, up 13% Y/Y.
  • Not including the most recent acquisition – as we would only be speculating on the pro-forma balance sheet – as at September 30th. 2023, Ametek has net debt of $1.3 billion and a trailing net debt to EBITDA multiple of 0.7x.
  • And looking at the valuations, the business trades at around 26x GAAP EPS, 25x Forward Adj. Earnings, and with an EV/CFO multiple 24x.

Management did recently revise their FY2023 Adj. EPS guidance upward from a midpoint of $6.22, now to $6.32, up approximately 11% compared to last year’s results.

Management indicated that they ended Q3 with a very strong backlog of $3.4 billion, near record levels and is down a modest 2% sequentially. But up 5% from Q3 2022 and up 23% from the end of 2021.

Slide 5

  • Diverse Business focused on Niche markets.
  • Strong growth in revenue and earnings driven primarily by acquisitions funded through strong Cash Flow Generation.
  • Slight yield w/ strong dividend growth of 12% over the past 5 years.
  • Revised FY2023 guidance upward in Q3 & maintain a robust backlog which remains near all-time-highs.
  • With a valuation of ~25 fwd earnings, in my opinion this places the business near fair value given its low double digit Adj. EPS growth and single digit organic revenue growth.
  • Balance sheet remains healthy but will change in next few quarters because Paragon Medical Acquisition.

Overall, I think that over the long term, as long as Ametek continues to execute as it has historically, the business should continue to perform well into the future as they are fundamentally sound and are aligned with many secular growth trends including automation & manufacturing, Energy production & Supply, and more!



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