Canadian Tire Corporation Ltd (CTC.TO)

It had a very good run and had a bit of a dip here. The worst for Canada has been seen from an energy price perspective. The retail area is economically sensitive and hot hit.

1.7% yield. It is coming along. They have been increasing their dividend. The retail business is tough. There is lots of competition. There does not seem to be a long term sustainable advantage that gets them to the 5% yield that he likes to see. Also, there has been financial engineering like spinning out their real estate. He is passing and would not be considering it except at a bottom.

He has been looking closely at it for about 8 months. He will be buying it in the near future. You could call it consumer discretionary, but it is not overly cyclical. They have done a great job with the products they have put in the store. The balance sheet looks good.

This is one of the companies in his safety and value portfolio. Valuations are okay, 15 times and he does not expect huge increases in earnings. They are in great shape on a balance sheet. He has had no sell signals. They are showing good quarterly earnings momentum.

It got revalued. It benefits from Target walking away from Canada. They executed well and are good long term thinkers. He thinks it will continue.

Has had a phenomenal run. It was not affected by Target coming into Canada. The vast majority of what they sell is imported from the US so the fall in the Canadian dollar will squeeze margins are cause price increases. Be cautious on this one.

(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.

One of the few retailers she owns. They had benefited from the bad weather and she expects Q1 to look pretty good. Have announced that they are looking at monetizing their financial service subsidiary and are also looking at a real estate REIT transaction at some point. There are events happening and she would definitely hang onto this. She is personally buying it on dips.

When they announced they were going to spin off a REIT, while retaining 80 to 90% of the REIT, why did the stock go up so much since the value is already there? The psychological aspects of the stock market are not always rational. Investors are hoping for increased dividend. He doesn't own Canadian Tire, but the REIT might be interesting to him.

Just as a pure retail play very expensive right now.

The REIT would be the third largest REIT in Canada. You have a lot of the value out of it by the announcement. They have done the right thing for the shareholders and the markets have correctly given most but not all of the value.

This is a good one. Seasonality tends to be from November right through until the end of April. Couple of days ago it hit a five-year high. Significantly outperforming the Canadian market.

There is a definite wall ahead of it (an area of resistance) at $74 and it needs to break through this before he would buy it. You might choose to take profits at that level.

Chart shows that it has a rolling top from early 2012. The little action in the last few months indicates that it doesn’t want to go anywhere. He would like to see a breakout above $73 or come back to the mid-$60. If you own it, you could consider taking some off the table.

Good company. A tough business with more competitors coming in. Seem to be doing the right things. Decent yield.