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

Just had a blow-out quarter. Likes that they are able to grow their same-store sales in almost every division this last quarter. Doing all sorts of interesting value creation exercises with the business. They still want to do more with the financing arm. They’ll probably do well over the next little while. Not very expensive, so you could get some multiple expansions.

Spun out some business. He avoided it because of the competition. A crowded space. There is some link between Canadian housing and this business.

Sell or Hold until the REIT IPO is trading? He would sell currently. It has moved up in price. REITs will have some tough sledding over the next while, as we see more product coming onto the market and long-term pressure on interest rates.

One of Canada’s best retailers. Have a great model in terms of a great corporate image and a unique mix of products. You combine that with the entrepreneurship of 450 individual dealers that run the stores, it gives you a recipe for a successful business. Likes this long-term. Stock has had a good run and he would look to add to this on weakness.

Just broke a new all time high. In a distinctive uptrend. You want to stick with it. A number of analysts upgraded or raised target on this stock. Seasonal strength is from late October until March, but for now stick with it. He would get out when it is below its 20 day moving average; when trend is not on the upside; and when it underperforms the TSX.

His model price is $87.52. That is a 5% positive differential. Thinks there is more value elsewhere, but you are not going to get hurt on this one.

On a seasonal basis it has strength from Oct to May. The stock has been in an upward trend. It is below its 20 day moving average. It has been outperforming the TSE. Two of the three indicators are positive so he is mildly positive for this stock. But the pop recently is due to the REIT announcement. He does not put as much weight on the fundamentals and he does not take this announcement out of the equation.

Buy the REIT or the stock? He reduced REIT exposure in the last few months, thinking Canada is slowing a little with the US being better. Thinks the value on the real estate is higher than they put it at. Prefers the US. The only risk is that it is a single tenant risk. But they are unlocking value in the short term. There probably is upside.

Feels the top of its range is EBV+1, about $78. Model $80.51, so it looks pretty good.

Is the problem with this stock the dual class share system or competition holding them back from breaking through new highs? We have been in a recession/slow growth in Canada and companies like this don’t do that well in this kind of a situation. However, the company has built a good base and you could actually see it move from here. He is looking at it again. There is a lot of competition in the sector. Have fantastic locations.

Very stable. Looks like it is topping off. It is not a growth stock any more. He would buy and hold it for a little while. Limited to $75 on the upside and limited on the downside. He is not avoiding it but there are others he prefers. 2% yield.

Not a big fan of retail. Thinks the consumer is retrenching. Good franchise and they run a good business but not one he would like to look at right now.

Took over Forzani over a year ago. Likes this company. Probably his only Canadian retail holding. They do very well in the sports segment and the acquisition will be well digested by them. He uses it as a defensive holding and doesn’t expect it to rocket up. It will pay you a dividend and grow steadily.