Dollarama Inc. (DOL.TO)

Dollar stores might be Amazon-proof. Time will tell. Their last earnings hit the stock hard. If you have a long-term horizon, you should be okay. Has a secure balance sheet. Growth has declined. So will revenues also decline or recover? Pays a 0.4% dividend.

Never bought it because of high valuation. Had a weak quarter and reduced guidance. It's starting to look attractive if you have a long-term outlook. Still trades at a premium to its US peers, though it's better position in Canada. Also new competition coming, though DOL denies any impact. They could increase their price points. There could be tariff impacts since they source goods from China, though DOL they haven't felt it. She may buy it during this pullback.

It has suffered lately. It is surprising, considering the overall growth of the company. Over the longer timeframe they have done phenomenally well. They added more stores and increased the basket size of the average customer. They dominate the Canadian market. The challenge is to continue to grow. They could be taken out by a US chain.

Not a buy. Its last earnings showed slower growth, but valuation hasn't gone down enough. Mid-20x forward earnings.
Cheap is below 20x. They are also facing pressure from buying products overseas and with rising labour costs. Overall, he is concerned with the Canadian consumer/retail sector because of high levels of debt.

hey had a disappointment quarter once in the past and the stock recovered pretty quickly. Strong management. She suspects the same will happen. One quarter doesn’t a trend make. The stock can’t grow at the rate it had been growing, but we are not there yet

Be careful, it is s expensive. It is extremely well managed. It could get wacked on any slowdown. They recently took their same store sales forecasts down and the sock went down. It is a well managed company and there is still room to grow in Canada. Watch the next few quarters and this could be a good entry point.

(0.4% dividend, Analysts' price target: $48.53) They're nearly at their lowest level. Their recent quarterly report disappointed deeply, and the stock took a hit. However, they've done a fantastic job increasing shareholder value, so they deserve the benefit of the doubt. They're down 20%. He sold shares recently, but it remains a core holding and will increase his holdings.

Hasn’t dropped enough for him to get on it. Amazing company. Lots of room to growth. Stores are always packed. But trading at 30 times earnings. Crazy for a retail company. Growth slowed. Another 5 dollars drop, and he would be looking.

The negative reaction to the latest earnings release now has him interested. He wonders what its capacity to grow in Canada will be. A one quarter blip is interesting, but he would rather wait and better assess their ability to grow and protect margins going forward before buying. He thinks input costs are on the rise and questions whether they have the scale to compete against online sales.

Dollar stores are favored by the major retail analysts as still having growth opportunity. However, most Canadians see a Dollarama on every corner. They have a dwindling ability to penetrate the Canadian market further through more locations. This company has a big PE and high growth expectations, but its growth ability seems to be slowing. A small miss in this context can have an outsize effect, as appears to have happened to Dollarama this month. He owns a little bit, would not sell his stock at this point, but would not buy more until he sees that the stock has reached its inflection point. He would wait for a couple of quarters, looking at the company’s comments to understand how they now see their growth prospects. Dollarama has some other opportunities in other countries but has not yet shown that these will develop into significant growth.

In the long term you have to like this story. He always wants to know when this growth phase ends but has not looked under the hood. So when a company like this misses, as DOL-T did recently, then does that mean the growth phase has ended, but he does not know today. You can trade it if you want but if it breaks here it could drop to $35 or to $25.There is not enough evidence right now that it is going to hold.

Pays a meager dividend, since it's a growth company. Same store sales guidance was lower than what the street expected, so the stock was hammered last week. It's still a great company with a good balance sheet and expansion plans. See what happens in the next few weeks and peck away at it.