Dollarama Inc. (DOL.TO)

Very good operators and there is still a lot of room to grow their footprint in Canada. They’ve gone from $1 to $1-$4 now, in order to provide a higher price point and better quality goods. If they continue to execute, they are going to be just fine for the next couple of years.

A great growth story in Canada over many, many years. He is not attracted to it because of valuations. The question is how much more can they continue to expand. Also, they may suffer a little in this environment where investors rotate out of these types of names. Not a bad company, just a little expensive for his liking.

A lot of the consumer staple/discretionaries are really good companies, and have gotten a little bit rich. He likes this and he likes the sector. ROC is 41%, which is really good. Valuation is still very reasonable and would be his kind of company.

The chart shows it is starting to break down a little. Broke below the 50 day and 100 day moving average, which is a bit of a warning sign. Hasn’t quite broke below the 200-day moving average. A great growth rate of about 16%, but trading at 25X forward earnings. Wait for this to come down a little when valuations are a bit better.

It is too expensive and they keep defying the odds. They are doing a great job of execution. It is priced for perfection. Just hold it. If growth slowed or margins got narrower, then get out.

Has owned this in the past. It is screening really well both fundamentally and technically. He is waiting for an opportunity to see if it pulls back. (See Top Picks.)

Wishes he owned a lot of this. It just continues to reach newer and newer highs.

(Market Call Minute.) A Canadian growth stock. It is not a value play, so it is not for him, but for most investors it is fine.

Phenomenal company with consistent returns on invested capital in the mid-30s%. Valuation looks reasonable. He got nervous when Dollar General in the US had a bad quarter but this didn’t happen in Canada, so you can still hold it.

This has been a sensational performer. The knock has always been that it is expensive. Currently it is trading at 27X earnings. They are rolling out more price points at higher levels, going from just $1-$1.50 items to $2-$3, and he understands they have plans to roll out even higher price points. A good organic growth story. They are opening 60 to 70 stores a year and have a dominant position. Trading at 28X, so be careful.

This has executed very well. He recently took profits because the valuations were getting a bit stretched. Trading at 27X earnings with a 16% growth rate, you are paying a 1.7 PEG ratio, which is a bit expensive. He would like to see a lower price.

(A Top Pick July 4/16. Up 7.23%.) A classic example of a stock that has had a big move, and had been trading sideways for the better part of the year. Recently broke into new highs, and was supported by good volume. Probably the best retailer in Canada.

(Market Call Minute) He would need to buy it cheaper.

If you want to hold it for 5 years, buy it now, otherwise wait for a pullback. It has run up and the valuation is a bit rich.

A great company and the growth has been fantastic. The only argument he would have is its valuation. They’ve been able to improve margins and are picking up market share. Fantastic operators. However, it is trading at 27X forward earnings.