Modesto's Incorrect FactsLook, I don't want to be irrational here, there are legitimate risks to CRH that one has to consider when looking at the stock. I have argued and continue to argue that investors are more than well compensated by the ridiculously low multiple for the stock (now well into the mid single digits on FY 2018E FCF), but one does have to think about risks too (e.g., Cologuard, future rate cuts, etc.).
But I really dislike people who spew incorrect facts when speaking about companies, and if Modesto's "analysis" is what passes for smart money in the Canadian market these days, that's pretty pathetic.
If Modesto thinks that stock issuance is important for the future growth prospects of the Company, then he clearly did not spend enough time on the business and has no idea what he's talking about. They haven't been issuing shares for acquisitions since their first acquisitions in 2015 (you don't need to believe me, pull up the SEDAR filings to confirm), they have no need to issue shares for acquisititions because they have more than enough liquidity between their line of credit and FCF generation to fund their projected M&A for at least the next 1-2 years, and management has been very clear that they don't intend on using shares in their rollup strategy.
Rather than issuing shares, they're instead now buying them back to reduce equity capital invested in the business, which you've heard me state will boost returns to us in the long-term (similar to the Malone/Singleton strategy).
Look, the stock price action has not been pleasant, i won't deny that. But as a fundamental investor, I'd argue that this is not in your control. What's in your control is doing your analysis, making sure everything checks out, and selling if the story has deteriorated meaningfully to the downside. Don't listen to incorrect facts from the Modesto's of the world. Do your own work, and come to your own conclusions. If you think the story has changed, then sell. If you think like I do that the facts remain positively in your favor, then stay long (maybe even buy more), and accept that the price action is just what other people think the stock is worth on a given day. There's no use driving yourself mad over it.