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

A classic retail merchandising stock in Canada. Has 2 periods of seasonal strength. One is from October right through until the end of November, and the other one is from February through to May of each year. This has a history of doing something that most merchandising stocks do. It goes up prior to Black Friday. On Black Friday and thereafter, they tend to come under some profit taking pressures.

Loblaws (L-T) or Canadian Tire (CTC.A-T)? He likes retail. This is probably one of his biggest sector weights. He has more US exposure than Canadian. Thinks the best theme you can focus on is home improvement and this company fits in there. This would be the one that he would choose in a very short run.

This is in the favoured sector, consumer discretionary. Has done a couple of acquisitions that have worked out well and the stock just runs higher. There is no sign of a top. Doesn't see any problem.

If you add all the parts together, it is worth a fair bit more than where it is trading at now. However, it doesn’t seem to him to be a great value or a wonderful opportunity here. Doesn’t see a lot of upside.

Can you see non-voting shares combining with the voting shares? People have talked for years about this company’s various class of shares disappearing or merging. He doesn’t see this happening in the near future. This was a battle that was fought in the 1980s. The company has done a remarkable job at surfacing value over the last while, particularly in the recent quarter where we just came out of a seasonally bad winter. Once that was over, there was a surge in demand. So far, they have been pretty adept at positioning itself within the Canadian merchandising market. Finds it a little bit expensive here. Earnings are forecast to go from around $7 to about $7.50. Doesn’t think there is a lot of value right now.

What extent does the duel class share structure impact the quality of its corporate governance, and its value as an investment? It does impact it, and this one doesn’t have the best corporate governance of any company out there. The duel share structure in Canada is disappearing company by company, and he thinks this will disappear in the next generation. Even though the stock has done well, you get a bit of the discount, and it probably should trade $5-$10 higher. It will get fixed when it gets taken over or the family dies. If you have a long-term view, you’re probably going to get some extra payment at some point.

This was red-hot for a while when they were spinning off the real estate properties into a REIT. Not expensive. They have integrated everything fairly well. Not sure what is driving this company. It will probably do 10% from here, which is a decent return.

Doesn’t generally invest in the retail space. Did a great job and it is not that expensive. A good investment on a pullback if you want exposure to retail.

Looks a little bit on the expensive side. The winter was good to them and they have been performing well. Management is doing a good job.

The best retail stock in Canada. There probably will be a split and there could be a dividend increase. Have done a really good job of managing and running their business.

A good name and has done very well. A great name in the retail space. Retail is a tough space, but less so in Canadian Tire’s space. We had a rough winter and this one has exposure to the repairs. Continue to hold this one. Yield is 1.65%.

This stock has done very well. She has not been investing in Canadian retail generally. Revamping their stores. Probably fairly valued at this time. Dividend of 1.2%. (See Top Picks.)

Just had an executive shuffle, moving someone from the sports side up to the president’s role. This is interesting because, between this company and Forzani, they absolutely dominate the sports equipment space in Canada. This is one of the few retailers that he would stick with here.

(Market Call Minute.) A spectacular growth story. Defying the odds in the Canadian retail space. Not that expensive. Not that cheap with some value creation on the REIT side, where they are spinning off some of their real estate.

A stock like this can be very sensitive as to how people feel about what spending is going to be like, especially around Christmas. We are entering a very, very competitive retail landscape. Although this has very good customer loyalty and very good store positioning, more and more of their lines are going to have severe competition in the next couple of years.