Dollarama Inc. (DOL.TO)

Still a lot of growth ahead for this company. Fantastic merchandisers. The way they are rolling out their product line and their price points, makes a lot of sense. This has done well because 1) they have delivered on earnings and 2) beaten expectations. Also, as money came out of resources, investors were looking for other areas, and there is a very narrow universe of stocks available. Feels that people are no longer going to be paying the 20, 25 multiple for companies that are growing at single digits, and this company may get caught up a little bit in that. If you own, he would consider Selling half your position, and come back to it on some weakness.

This is a component of the consumer discretionary group. Consumer discretionary has done well. He is worried about the sector, but this one is still an outperform.

He bought this at the 50 day moving average, which is the support level where he likes to buy stocks. They have 900 stores in Canada, which makes it 5X bigger than the next Canadian dollar store. They operate in a very attractive and growing segment of the retail space. There is still a lot of room for organic growth in Canada. Their plans are to go to 1400 stores. Yield of 0.51%.

The good thing is that the dollar store theme is not saturated yet in Canada. They are continuing to execute very well in their operations and opening new stores. Thinks there is still more upside through taking credit cards, better inventory management and better sourcing. Very high multiple, but if you own continue to hold.

This is a very, very strong situation. You might well speculate that eventually that this gets taken out. For the time being though, it will continue to expand.

A great company. It always appeared to be expensive, but the company kept executing quarter after quarter. Multiples have crept up to about 18 or 19 times earnings, so not a cheap stock, but there are so few good-quality retailers in Canada.

Dollarama (DOL-T) or Alimentation Couche-Tard (ATD.B-T)? The consumer sector has been one of the most resilient sectors in the US, and then there is Retail which looks very attractive. In retail, the lower cost providers are in the sweet spot like both of these companies. He would have no problem buying both of these. Great companies. Both pulled back in the last week or so, giving good entry points.

Still in growth mode. Trading on a trailing basis about 33X earnings, and on a forward basis at about 28X earnings. When you get into a phase where the market loves a story and loves the growth, there is no good way to value it. As some point, when that growth slows or ends, you are going to get a big multiple contraction. A stock like this doesn’t have terribly high margins, and when there is a growth issue, you are going to start trading at a market multiple, which right now would be at about 18X earnings. Technically, if it starts making lower lows and lower highs, that is when you know the multiple contraction is likely setting in. As long as it keeps having higher highs and higher lows, you can probably stay with it.

He was skeptical, but it has been successful. The stock chart tells you it has a good chance of going higher. If the consumer has any spending power left, he will do it here. Perhaps take some profits and wait for the next downturn.

He likes the positioning of this company, because there is not much of the same kind of business in Canada. They pretty much have a monopoly on the space. Not extremely expensive. Trading under 2X PEG ratio, but it is still at about 1.7. Not cheap, but deserves a premium valuation.

It just won’t quit. They increased their view of how much they can expand in terms of stores. It is defensive. He can’t get over the valuation but clearly it has been going up and still will.

It is a great company and if you can buy it on a dip you will be well served. It is defensive and the business cycle is turning up. Things are looking better states side. You will be fine if you get it on a dip. Dollar Tree might want to buy them to get a large Canadian footprint but he does not buy things because he thinks their MAY be an acquisition. Prefers cyclical names.

She is always looking at it and has missed it. It is always too expensive to buy. They have a dominant position in Canada. They have the first mover advantage. On a pullback she would add to it (5-10%).

This is a true organic growth story, not an acquisition rollup story. They are really dominating the $1 space in Canada. A high-quality business that has a lot of room for further growth. Doesn’t see a lot of upside at this level. He would rather get it at 15%-20% lower from here.

They are very good at their organic growth. They are defensive and cyclical at the same time. People still shop there when things are improving. One of the issues is that they source a lot of their product from the US so the currency issue may affect them.