Jamie Murray Dollarama Inc. DOL-T HOLD May 04, 2018

Last year, even when US dollar stores were struggling, DOL was chugging ahead. Management has been a great acquirer, integrator, and operator. Not cheap. Wouldn't bet against it. Hold and be happy, until something changes.

Traffic and basket sizes remain robust, as sticky inflation over the years has caused consumers to trade down. Bit of softness in Canadian economy for Q2 and Q3. Paying a premium at over 40x forward, but decent 15% growth rate. In Canada, very little competition. Very good margin expansion over time, strong FCF. Aggressively growing store count in Canada and Latin America.

 It is Canada's largest dollar store chain and is opening another 70 to 80 stores. Also its international expansion is just getting started. Has been very consistent in earnings growth.  It has a price target form the street of about 2% upside. If buying, wait for a pullback.

Believes he heard a comment that its forward guidance is uncertain, and that could be the reason it's pulled back. Earnings are one thing, but the street looks for forward guidance because that's what's going to happen next.

Longer-term chart is a good picture. On the 1-year chart you can see consolidation. So long as the neckline (a bit over $180) holds, you're fine to own it. He always buys on a positive test of support. Everyone wants to buy as cheaply as possible, but the problem is that it could get cheaper by far. Don't buy until it proves that level of support by bouncing up.

Pretty cautious on consumer names, since we're about mid-late cycle economically. Interest rates coming down might help the consumer. In the consumer space, he'd prefer a name like this. Downshift in spending going on now.

If true that economy's slowing, then people trade down and this name will do better than average. Over time, economy will grow. Has been a superb company. Extraordinarily well-managed. Doesn't own because always too expensive.

He always thinks it's a great place to buy anniversary presents ;)  It's done nothing wrong, and investors have fallen in love with it to some extent. He'd take some $$ off the table, and perhaps buy in again lower, though still likes it long term. Reaching saturation in Canada, so it's having to go abroad. International expansion can be good, but also problematic.

Worried a bit about growth in Canada slowing and not being offset enough by purchases further afield. Be mindful. Valuation of 40x PE is up there.

A compounder for years to come. Is surprised with the lack of competition in Canada. Is highly defensive. Helps that customer trading-down is happening. Are expanding a lot into Central America.

His preferred Canadian retailer. Low cost. Cumulatively, inflation has taken its toll since the pandemic.

One trigger was valuation, trading at mid-30x PE. Look at its sourcing -- most stuff comes from China. As Canadians are getting pinched, all the discount banners are benefiting massively -- almost every metric has been sensational, but so are the valuations.

He'd love to own it, but can't come to grips with paying that valuation. A great one to add on a large pullback.