Dollarama Inc. (DOL.TO)

(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.

It's had a real drubbing this week. He's watching it. He thinks it's been oversold this week. It had a great growth run in Canada and is now looking at South America for growth. If it drops below $39.50, it could fall to a painful low-$30's.

Slashed their sales growth forecast today. He likes it, but high-valuation companies like this get hit if they slip in a report. They have a long runways in organic growth just through price increases over time. It could drift a bit lower, so wait a bit, but it's fine to have long term. A shareholder-friendly company that regularly buys back shares.

Down 17% today, their single-worst day. It's been a Canadian retail success story, but earnings were slightly disappointing today. Traditionally, it's had super, robust earnings growth with 5% increases in same-store sales. After a decline in Q1 2018, investors expected better results from Q2, released today, and didn't see it, so they sold it off. He'll take a closer look at this again--but not right now. Give it time to for the dust to settle, then maybe take a position.

Canada-US relations are more important than US-China relations. For specific goods, costs can go up at Dollarama, but for plastics, they can probably find another supplier. The stock was a darling, but now it’s been flat. Has gone below the 200-day moving average, recently a death cross. Concerns regarding NAFTA. Q1 was weak. See what tomorrow’s guidance is before jumping in.

It is a great retailer. The smaller price points add a lot of value there. It comes down to valuation. It is growing as a company but is it going to grow by leaps and bounds from here. Previously you had a transition from cash to credit cards. Every time they increase the price point they do well. They should shine in a down market, however. It's taking a breather.

It has been a good stock. However this year, now beginning to see lower highs and lower lows. Would not buy at this point. Would wait for a better trend. Not sure how much growth is left.

A portfolio holding for three years for him. They were affected by the terrible weather in spring. Not a cheap stock trading at 24 times next year earnings. Great management team. (Analysts’ price target is $56.28)

The 200-day moving average: Dollarama has recently moved below it after a long uptrend since 2016. The key level is getting above $50, but if it does not, he fears a further downdraft.

He likes this stock. The 3 for 1 stock split was a smart move and made the stock more attractive. They are opening 1700 more stores in Canada. He looks at it as both a long term buy and short term buy. It is also a defensive stock.