Keith Richards Canadian Tire Corporation Ltd. (A) CTC.A-T TRADE Aug 27, 2025

Steer clear. Generally, retail is a tough industry. Not good insulation from online competition. Wary of retail that's not specialty. Would prefer HD, ORLY, or dollar store segment, but wait for pullback.

Tends to be a more economically sensitive retailer. Could benefit from rate cuts and an uptick in discretionary spending. But rate cuts would intensify competition. Good portion of profitability comes from its financial services (credit card) business. 

A contrarian idea, which is how you make outsized returns. Has assembled a nice portfolio of brands over time. Nice job steering customers away from online competition by focusing on bulkier items. Price down due to recession fears. A reversion-to-the-mean play, aiming for 60% return back to all-time high of $215, plus impressive dividend. Yield is 5.2%.

Consumer pullback in spending during a recession is not a risk unique to CTC.A. All retailers face this. Very good profitability, strong balance sheet, trades at 12x earnings.

As a play on the Canadian consumer, it faces higher unemployment and slower economy. Store traffic is slowing.

Continues to slowly grind higher. Likes the technicals, especially if it breaks above the highs of 2023. 

Market approves. Part of an effort to return focus to core retailing. Buying a high-end brand like this was perhaps off-strategy. Good business, but facing headwinds like weaker CAD, trade war risk and potential consequent recession.

Just OK. Better-managed retail out there. Essentially, everything it sells is a discretionary purchase. Also susceptible to tariff risk. Recent retail sales report in Canada shows slowing. Sidestep this one.

Can't tell what the impact of a trade war will be; they receive a lot of Asian goods. Also, this is consumer-dependent which is a risk. They are selling Helly Hanson at a profit and will reinvest funds in tech. They're buying back shares. Not a bad business and are profitable, but will never have a high PE, currently in their historic range. More of a trade, not a long-term buy.

Over the long term, great Canadian business that's gotten really efficient about how they retail. Consumer recession might happen; not right now, but it is a concern. Incrementally, will be a better business over time. Tariffs will have an impact on some of its stuff, but which stuff and how much? If his team can't figure it out, they tend to just stay away.

Bouncing off resistance, may be breaking out. The further back in time, the less important the peaks are. If the breakout continues, give it a bit of time (2 weeks or so) to make sure it's legit, and then he'd add to his position.