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Opinions Peter Brieger
Canadian Tire Corporation LtdCTC.TODON'T BUYDec 29, 2014
Stock price when the opinion was issued
As of Jun 17, 2026. Market Open.
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He owns little retail, because it's very difficult for these companies to have a moat. Walmart and Costco are exceptions, but their valuations are very high. It's very tough to find a moat and low PE in retail. CTC has done a great job making their operations more efficient, so he likes it. Also, it's not expensive, but prefers ATD, which is more durable. He considers CTC a discretionary stock, which will be impacted by the oil shock and inflation..
Traditional bricks and mortar business that will face competition from eCommerce. Undifferentiated shopping experience that is not enjoyable. Discretionary product offering makes it difficult to retain customers. Would not recommend investing at this time. Housing slowdown in Canada will also be hard on the business.
The stock is 'bouncy' certainly. We think it is a decent company but we did not like the decline in sales in the last quarter, especially in a period where inflation is still present. Yes, some of its weakness was clearly related to the weather. But at 22X earnings, we think the valuation could be adjusted to reflect the current lack of growth. Thus, we would fairly reluctant to start an aggressive buy program on the stock today.
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Many retailers are coming off a rough quarter, but CTC is a seasonally sensitive stock. Last winter saw weak demand for winter items like snowblowers (due to a mild winter), and that's impacted CTC shares. Assuming regular seasonal weather in spring and summer, business should pick up. Hold if you already own and don't sell. He doesn't see long-term weakness.
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Premium contentAnother iconic national brand, Canadian Tire is the dark horse on this list. It's no secret that retail has struggled this year as higher wages, costlier shipping and theft (aka “shrinkage”) have battered the sector. Canadian Tire has sunk 30% off its 52-week highs and recently made a new low of $131.46. At the same time, the stock's PE has fallen below 10x compared to its five-year median of 11.5x.
Long period of low dividend yield. Current share price a good price to buy at. Likes automotive aspect of business. Improving business prospects.
Ryan Bushell
(These are the voting shares and have very little volume.) The company has done a great job in developing its market profile. Its performance, until just recently, has had a pretty good run. The continuing decline in the Canadian$ makes purchases of foreign goods more expensive for any importer in the retail business. He would look elsewhere for retail exposure. If he were going to own it, he would own the A shares, because if something goes wrong, the B shares would be difficult to get out of.