Dollarama Inc. (DOL.TO)

An equity which has a tendency to do well when resource stocks in Canada are not. Has done well because they it is perhaps the 1 out of 10 Canadian companies which is actually a good company. It’s always on his Watch List. They are producing very attractive returns and in some areas, are best in class.

One that got away from him. He likes companies that are good and getting better, and this is one of them. The price chart seems to gap higher about every 3 months. He’s been very cautious on retail, but this has been a really good foil against the group. It tends to rally around the earnings period and then consolidates after. In the short run, it’s a little extended and a little stretched away from the 50-day moving average, so there is a little risk. A good company. As a long-term hold, this is good.

Your classic momentum stock. One of the few companies in Canada that has continuous earning beats. Has a good business that continues to grow. It is a really expensive stock. There is a world of investable opportunities out there, and a lot of great companies like this that he would like to own at some point, but you are paying many, many, many future years of profits now at these valuation levels.

This just continues to perform, obliterating targets. They are insulated because it is such a niche market. The stock is expensive, but trades at a premium for a reason. The targets are probably 10%-15% higher, so it is probably a stock you can continue to own.

An amazing Canadian success stories where many people didn’t realize that people from every income strata would be running into their stores. Not a cheap stock and he wouldn’t buy it here. Revenue growth has slowed, and there is a limit to how many Dollarama’s you can keep on opening. The company is using its free cash to buy back shares.

This is not cheap. On a P/B basis, it is extremely expensive. He calculates it is about 40% overpriced. Be careful. Use a stop loss.

It has not been around long enough to allow a seasonality study. It is in a long term upward trend, momentum is positive and it is outperforming the market. Retailing does well from the middle of September until the end of December.

One of the only retailers that is AMZN-Q proof. It is a tough one for a value investor to buy. You have to be careful if they ever did disappoint. You have to keep your eye on it. The valuations are way too high for his style of investing.

They’ve done a tremendous job of adding stores. They are relentless in testing things such as using credit cards, which they tested in a few stores, and found that the customer using a credit card spent more, which justified the credit card fee the store had to pay. Has an interesting partnership with a chain in Central America. Feels they are poorly understood by the street. ROE is over 100%. P/E ratio is probably in the mid to high 20s. Growing at 30%-40%. Probably fairly valued at these levels, but he likes them a lot.

The $15 minimum wage. Larry knows someone who owns some Tim Horton’s locations that may go under because of this. You have to look at what the percentage of wages at DOL-T to find out what the impact is, although there will be one for sure. The $3 and $4 merchandise is growing things. He is a value investor and when a stock is at a huge multiple, he is not the right guy to ask about it. Technically it is overbought. He expects it to continue going. You continue to trail your stop up around the trailing one month average.

He always saw these stores as stores for people who might be having a tough time. However, everybody at every demographic level seems to love shopping at them. The company has done an incredible job. Also, their products do compete with Amazon (AMZN-Q). The stock is just too expensive on a valuation basis for him, however, management is earning that valuation.

This looks like it has legs forever, however all things do come down. This is a wonderful company.

This continues to fire on all cylinders. Numbers in the last few quarters exceeded analysts’ targets, and expects that will continue for some time yet. They’ve done a good job of increasing same-store sales as well as the number of stores. They’ve gone from a $1 format to higher price points, and are also accepting credit cards.

This has done an exceptionally good job of moving up the food chain and increasing prices to $5. The strengthening Cdn$ is going to help a little, because they source a lot of their product internationally. A very, very well-run company. The one company that is not susceptible to the Amazon (AMZN-Q) potential problems. Trading at a pretty rich valuation.

Seasonally it does well in the spring time. It has been forming a trading range. If it breaks below the support then it becomes a head and shoulders pattern. There are some warning signs that the stock is having some difficulties.