Dollarama Inc. (DOL.TO)

He has been too bearish on this company in the past. Now, however, with the yield below 1% and greater competition in the space, he would prefer to take profits or look elsewhere.

It is a great, great company. A truly Canadian success story. He is wary of the valuation at close to 30 times earnings recently. Grocers are half that. It has pretty good visibility. They think they can get to 1700 stores before the market is saturated. The next leg of growth is Latin America. They grow dividends and buy back stock with very little competition. He would buy on a pull back.

The chart makes this a rock star, although it has paused recently. This business is a pure momentum growth stock that always trades at a rich multiple – it is always expensive. He tends to stay away from these stocks as the risk is too great of buying at the wrong time. It only pays less than 0.5% yield.

It's always been expensive, but he bought after a bad report three years ago. It's trading at 25x next year's earnings, so still pricey, but they are great operators. Strong same-store sales growth and they are opening more stores. There's room to grow. Recently, the stock pulled back and has been flat for the year, so take advantage of this lull. Their Q1 earnings report blamed the bad weather. Sales may make up for that loss in Q2.

It's looked expensive for a number of years and now looks cheap--but it just did a stock split. If they do an earnings miss, they will dip 8-10%. That's an opportunity. DOL carries a little higher risk than normal. It's expensive, though well-run. Quebec is the last bastion of growth for them. The U.S. has too much competition for them. In 5-10 years this will run into growth problems.

It just split 3-1, which creates liquidity. He likes this stock. It's dealing with all-time highs, but with a now-limited upside.

He thinks this is massively overvalued, given it sells “junk” items. It has a 30 times multiple. He would rather buy McDonald’s with a 20 times earnings multiple.

He's be happy to be long this and sees a little bit of upside left here. It split today and expects it to see $70. The next quarter should be good, because the bad weather this quarter will lead to pent-up demand.

Only 27 Canadian companies match his screen. This one met the 30% ROE hurdle. He still sees a good runway for growth and likes the growth prospects in South America, where they have a store count of 101 locations now in a minority position with an option to become the majority holder. Yield 0.3%. (Analysts’ price target is $55.94)

(A Top Pick July 10/17 Up 29%) They are extremely well run and have a great runway for future growth. They do not do anything haphazard and they price competitively.

Had a good day today, but earnings lately a bit soft. Started taking a position when it was basing in April/May, and held a full position by early June. Market liked that they’re going to focus much more on Latin area expansion. Likely to become a majority shareholder in Dollar City. Increased both their eps guidance for 2019 and 2020, as well as their share buyback allowance. Drug capx marries well with the technical bottom you can see. (Analysts’ price target is $167.50.)

Every time investors think this stock has run its course, it pull another rabbit out of the hat, like adding 1,700 more stores in Canada. He likes it and sees good growth. A defensive play when we're late in the cycle.

This is a very well-run company. It is a strong defensive name--people will keep buying from this company when the economy goes down. However, it is trading at a very high valuation. Growth has justified that in the past. The company added credit cards a year ago and that increased the average sale considerably. It is also expanding online and owns a foreign company in a similar business. So there will be some growth but he is concerned that future growth will not keep up with the rise in the stock price, and that if there is a recession, the drop in value of this stock might be steeper than the growth in sales.

It is forming a nice base at $146 and would use this as his exit. It looks good fundamentally with a $10 profit target anticipated. Yield 0.3%. (Analysts’ price target is $165.69)

This is a growth story, not a defensive staple one (a struggling sector lately). But his concern about DOL it that it's trading at 28x earnings, so it's expensive. So, at the next misstep that happens to them, like an earnings miss, this stock will drop. It's well-managed and they haven't seriously missed an earnings in the past, though. It's come off its highs, getting way, way expensive and now only slightly expensive.