Dollarama Inc. (DOL.TO)

Just reported some great numbers. Good earnings and good guidance going forward. A good name in terms of management and execution, and they have a lot of runway for expansion in Canada. Trading at 26X forward earnings, which makes him a little concerned. It has a 15% long-term growth rate, so it is still at a 1.5X PEG ratio, not extremely cheap. They are rolling out credit card acceptance nationwide for the 1^st time, which should be available by Q2 fiscal 2018 which should help sales. Feels the valuation is a bit stretched.

The leading dollar store in Canada. An absolute growth powerhouse since the IPO in 2009. Reported 4^th quarter earnings last week, and it was a massive beat relative to expectations. They increased their original target of growing to 1400 stores in Canada, to 1700 stores. At the current run rate, they are building 65-70 stores a year, and still seem to manage to generate very good 5%-6% comps in same-store sales growth, as a result of rolling out higher and higher price points. Great management and great execution. He would be very comfortable with this.

Chances of splitting? Just reported earnings and had very good numbers. They continue to exceed expectations, and as a result their share price is rewarded. Trading over $110, so it does beg the question whether or not they should split. If they split the shares, it makes it easier for retail investors to invest in it. However, you don’t really create any value when you split or consolidate shares.

A record high today. He has been long for three and a half years. It hits all metrics. Valuation is still pretty reasonable. The trend has been pretty strong.

They had a phenomenal quarter. Same store sales were way better than analysts were expecting. The margins were much better and they are predicting better margins for next quarter. The constantly higher prices make margins much stronger. An incredibly well run company. She is a huge fan.

One of his larger positions. They have been consolidating for 6 months. Their financial reporting has been excellent and they come out with earnings tomorrow. This is an excellent Canadian growth story. They have another 300 stores to open in Canada. They have a two year payback. He is not sure how they grow once they have saturated the Canadian market. They buy back shares and have done an excellent job of increasing shareholder value. He is buying here. Try for below $100.

This has done very well in expanding their business. The thesis is that the Canadian market is under penetrated and under stored compared to the US. They have obviously come a long way in catching up. There is still a couple more years for them, in terms of catching up. They have some feelers in South America. In the meantime, they are going to continue to introduce some higher-priced items. It is a higher risk stock now compared to what it used to be.

Had owned this, but sold it a little while ago. A lot of consumer staples/consumer discretionary names are getting a little expensive. Trading at 26X forward earnings with a 15% growth rate. Their execution is phenomenal and there is not a lot of competition compared to the US, but it is expensive.

Even though retail has lagged a little, this company has a very specifically strong business model. If you want to have some exposure, he wouldn’t have a problem owning it.

The company is expanding, but it is hard for a discount company to raise prices aggressively. This has been a wonderful stock. He doesn’t see what the catalyst is going to be going forward for the next 12 months.

(A Top Pick July 4/16. Up 10.67%.) Has a long runway, but is limited in terms of the number of stores they can open in Canada. They have about 1,000 now, and management has suggested 1,400 will be the saturation point, although they are also increasing same store sales. Shares have been trading sideways for a couple of months, while operationally they have been knocking it out of the park. At some point he expects there is going to be some catch-up.

He likes this franchise a lot. Very unique in Canada. It has a major advantage over any other dollar store franchise. He took profits on his holdings. The stock has been really meandering sideways for some time. This is because it is trading at 27-28 times trailing and forward earnings. Not cheap. Management is doing a very, very good job. They are planning on opening 60-70 stores this year. The valuation still holds him back from wanted to own this.

This has been consistently earning a 40% return on invested capital for 8 years or longer. The valuation looks very reasonable. It has had a great run over the last couple of years, so you should be a little careful.

Technically there is nothing he can say to Sell it, with the exception of common sense. The run is too big unless it is going to split. He likes the sector. This one is very, very rich.

As a value investor, this is not one that would come up on his radar. As a growth stock, it has done very well, and thinks it will continue to do so. For the long-term, it will probably do you well.