Canadian Tire Corporation Ltd. (A) (CTC.A.TO)

(A Top Pick May 13/16. Up 10.81%.) There is no real reason for the recent pullback. He still likes it and it is cheap. 1.7% dividend yield is fairly light for being an established business. Trading at around 15X. Still buying for new clients.

A very Canadian company and there is nothing like it in the US. The outlook is probably a little bit more GDP growth. This is going to be the destination shop for most men who are looking for shovels, etc. Their ownership structure with the stores, where they have local ownership, is a big plus. Dividend yield of 1.1%.

This is a monument that will go on, and the recent drop is probably a buying opportunity for the long-term. He doesn’t know why exactly they haven’t got their e-commerce going, but many serious companies have failed when they try to get e-commerce together.

This has done a pretty good job. Earnings are growing and have created shareholder value since about 2010-2011, and have done it in the face of increasing competition. They are now navigating through this more difficult retail environment pretty skilfully.

If he liked any retailer, this would be it, but he doesn’t. They will become a player in ecommerce.

He has no retail exposure in Canada, other than Loblaws (L-T), which has been challenged. He isn’t worried about a Canadian recession; however, doesn’t think there is very good, long term, secular growth underpinning a lot of Canadian retailers, including this one. There are headwinds, including increases in e-commerce penetration, which they have done a pretty good job of staving off. If consumption, household formation and homeownership starts to turn, that could have more of a negative impact on companies like this.

Old and boring, but he likes old and boring when it comes to investing. Its share price has really outperformed, and a lot of that really comes down to management and how the business has been run. Although there has been some change with the CEO, it has really been change to go back to who was the CEO before. 63% of their business is Canadian Tire which has about 500 stores, 20% is the SGL Sports and about 15% is the Marks brand. Their business now is what they are going to do with their e-commerce platform. Dividend yield of 1.6%. (Analysts’ price target is $175.50.)

A great Canadian success story. They’ve made some good acquisitions domestically, and has shown real ability to grow through this economic recession that we have seen in Alberta. In the last few quarters, they’ve really surprised analysts to the upside.

They have executed well with their Marks brand, gas stations and financial arm. They are one of the few retailers that has constantly made growth and dividend growth. They even succeeded in holding their own when Wal-Mart came to Canada.

A very well-run Canadian retailer. He likes what they have been doing. It always seems very expensive. He would like to see a bit of a pullback, which he doesn’t expect to see for a while. Earnings have come in above expectations, and store sales seem to be relatively okay.

(Market Call Minute.) A great, long term, Canadian retail franchise. It’s close to its 52- week high.

Big news today. Strong sales. Maybe there is something else in there. See how it closes today. It could come back to the $145-8 level. We could be a slight amount over valued and you might want to sell half your position here.

They are very unique in that they are in the retail space, but they are able to get their inventory cycled through the system and out to the public so quickly. They always have a constant flow of heavily discounted items that continue to flow through. Along with pairing with Markets that certainly helps them to cultivate a home grown brand of themselves. You are always going to need to buy windshield washer fluid and other auto parts.

Consumer discretionary is certainly the right space. This had a nice move from its low of last year, and he expects it will revisit $135. Thinks it is going to be tough for it to break above its peak. With Canadian debt levels where they are, it is hard to see a catalyst. He would be looking to buy this a little lower. It might be more of a Trade than a Hold until it gets through its resistance.

The 2 periods for seasonal retail are from October 28 until November 29, and then from January into April, which is actually a stronger seasonality period. He would not be looking at owning this at this time.