Dollarama Inc. (DOL.TO)

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.

A very expensive stock. On a Price to Book basis, it is out of sight. On a Price to Earnings ratio, it is nothing to write home about. However, this is a momentum stock which keeps on working and keeps on producing nice numbers, because it is a stock for the times. It will keep on going until it doesn’t. When it doesn’t, you had better not be there, because the downside risk is really something.

This stock has been amazing. It is well-managed and they hedge their currency, they basically do everything right. Introduced credit cards recently, so there will be some cost benefits going forward. There is always something good happening at this company.

One of Canada’s greatest success stories. It is common to sell too early in this name. They have impressed in terms of their store roll out and have outperformed their US peers. He thinks they will continue to deliver. Stocks don’t go up forever and will eventually pull back so you can get it again. He thinks it will split, but this won’t increase value for the investor, however.

(A Top Pick July 4/16. Up 34.83%.) This is, bar none, one of the best retailers in North America. Exceptionally well run. Has a very high ROE. Their original runway in the opening up new stores was 1400, and currently are at about 1100. They have recently increased that to 1700.

All 3 of his top picks have an element of defensiveness to them. This company has had a massive run, but they still have a long runway for growth with another 600 stores that they would like to open in Canada. They’ve been recently testing their model with some Dollar Stores in Central America, where he thinks they will make their next move. Dividend yield of 0.36%. (Analysts’ price target is $140.)

Sold his holdings a little while ago. Long-term, this is a strong name, because there are not a lot of competitors in Canada that can come up against this company. In the near term, it is a bit expensive. Trading at 28X forward earnings. Has a good growth rate of 15%, so the PEG ratio is going to work out to about 1.6X.

(Market Call Minute) A real solid company and he would continue to hold it or wait for a pull back if you want to own it.

A very misunderstood stock. If you are an investor in Canadian equities, you have to consider owning this at some point. Because of its name, people think of it as a dollar store, but they have a lot of different price points.

More of a growth stock, and you are paying a lot for that growth. Trading at almost 50X earnings. In order for them to sustain their multiple, they have to continue to surprise on the upside. As a value investor, this really hasn’t shown up on his screen. At this valuation, it is not something he would look at.