Stock price when the opinion was issued
Wouldn't buy now. Has benefited from the economic uncertainty, and so valuation has come up dramatically. North of 35x PE, so risk that could contract over the long term. Wonderful business, well positioned with price points to capture a larger portion of wallets in tough times.
Last conference call referenced a small impact from sourcing from China, with the hit to margins yet to be seen.
Great numbers yesterday, as well as an all-time high. Still likes it. Canadians continue to downshift spending into more affordable channels. 60% of sales from private labels, which increases margins and differentiates themselves from competitors (not that there are many). International expansion into Dollar City in Latin America is good for long-term growth.
Premium valuation of 41x forward earnings. Sees 15% growth. To add, wait for better pricing opportunity.
In his firm's Canadian dividend growth strategy portfolio. Not a great dividend, though it does grow. Focused more on inorganic growth and share buybacks. Almost AMZN-proof, scale gives them buying power. In Canada, topline is growing close to 10%, margins are improving. Trades at over 40x next year's earnings, so wise to trim.
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.
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.