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

This has been a big beneficiary of the rise of do-it-yourself consumers, like the big hardware stores. But at some point, the consumer gets tapped out. As interest rates move up and it is harder for people to service their mortgage, they will be less able to improve their houses. Canadian Tire has also made acquisitions of new products over the past year and it is unclear how those will work out. It’s a great name and a great company but its valuation is too high and its market might shrink soon.

Dollarama vs Canadian Tire. He used to own Dollarama (DOL-T) and believes the growth will flatten out. He owns Canadian Tire (CTC.A-T) and the recent earnings surprise is not too worrisome to him. He thinks the CTC.A-T model to roll out directly to in-home sales will take time and does not believe the stock will go down much lower from here. Overall, he thinks it is a better valuation than DOL-T.

It is a household name. It has had a good run over the last 5 to 8 years. Is it AMZN-Q proof? Some areas but not all areas of the business are. It has held in well compared to other retail names. A slight miss on earnings due to weather. it is not an area where he wants to go in Canada. If it kept moving down it could become more attractive. You will never get too beat up on it. They are rolling out a new rewards program and updating some of their stores.

This has been a decent performer. They are a domestic retailer. Mark’s Work Warehouse has worked well for them. Canadian retail is pretty competitive so she is not compelled to buy this one.

This has been a decent performer. They are a domestic retailer. Mark’s Work Warehouse has worked well for them. Canadian retail is pretty competitive so she is not compelled to buy this one.

(A Top Pick May 03'17, Up 9%) It does not get talked about as much as it should. Strong balance sheet. The acquisition caused a bit of a pull back and created a buying opportunity. He is continuing to buy it for new clients. There is lots of upside potential from here.

Comparing Canadian Tire (CTC/A-T) and Dollarama (DOL-T). He sees Dollarama as the one you throw in a box and look at it 3 years later. The stock is expensive, but it continues to show 11% sales growth and 12% earnings growth. They have more room to grow in Canada and their international division provides further significant growth opportunity. Over a long-term time frame, he expects Dollarama to do quite well.

CP-T vs. CTC.A-T. CP-T is not as cheap as it used to be. The rails in general are benefiting from a strong North American economy. They have pricing power. It is a great business. CTC.A-T is basically only exposed to a Canadian consumer. He would be cautious on this one.

It used to be single digits returns but former management has made it better recently. It is trading below its 5 year PE multiple. He is pretty comfortable owning this one.

A name that you don’t want to be negative on. Keeps on going. It is trading at 15.6 times earnings. Growth of 10%. A fine name. Going to do OK.

This has a unique position in Canadian industry. They are retail and financial services. This is a tough space but they seem to be weathering the storm. It’s well managed.

They want to make an acquisition that perturbs the market. It is a big price tag. It is a 20 times purchase price. You have to give them credit for being able to execute. They have done a lot of good acquisitions since 2016. He feels this pull back is a great buying opportunity. (Analysts’ target: $186.64).

Had there been 4 top picks this would have been the fourth. He really likes it. They bought Conoco assets last year. The street didn’t like the deal and lost confidence in Management. They have new Management now with a new CEO that is on the path of right-sizing the company and its balance sheet. It is looking really well now, particularly if we go to a 80 – 90 dollars barrel of oil.

One of those brick and mortars that the people still go to. A good opportunity to get in. They are paying a $ billion to pick up Helly Hansen.

He sees a good up channel, so try to buy near the bottom of the channel.