Dollarama Inc. (DOL.TO)

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.

Management knows exactly what they are doing in the sector, and now they are going to expand outside of Canada. You have to give them points for a really consistent execution. They have done almost nothing wrong since they re-emerged as a public company. Have completely dominated their niche and there are still opportunities. If management is going to expand, you want to ride that train with them.

A terrific company. Well-managed. There was a Short report out of the US explaining that the company sells goods in Cdn$, but buys them with US$. However, the company explained that they hedge their currency.

It is an expensive stock. It is a great company and it is going to grow. If it goes down a little bit, buy a little more. It should continue to grow and they suspect it will outperform the market.

This looks expensive, so the entry point has to be lower. After its big drop in Dec-Jan, it is back to delivering good earnings, but it is about 27X PE. If you own it, it is easy to Hold, but to get in, it is difficult and you would wait for a market pullback.

Their ROE is in excess of 100%, putting them at number 2 in terms of ROE. An extremely well run company. Their next earnings report will probably send them higher.

You can’t argue with how they have executed. A top pick today is similar to this one. They continue to build more stores and they continue to get more of each consumers spending. It has just dropped below where he would like to own it from a ranking point of view, but it is because it is expensive. If you put it away then maybe it gets acquired by a US dollar store at some point in the future.