Dollarama Inc. (DOL.TO)

(A Top Pick Jan 16/14. Up 40.67%.) They have about 920 stores. Have the ability to grow in a number of ways including adding 60 to 80 new stores, same-store sales growth and increasing price points here and there. A little bit of yield as well.

This has been a fabulous story since it IPO’d a couple of years ago. The technical analysts’ favourite phrase is “the trend is your friend”, and the chart on this one shows a pretty impressive upward trend. There is no indication that this stock is showing signs of reaching a high. We are actually going into a period of seasonal strength for this, into the spring time.

He has a hard time telling you to “buy it” in here. It is going to be a beneficiary of a lower oil prices where people take their excess money and spend it in places like this. Money has moved from the resource sector and into the growth sector moving evaluations to all-time highs.

One of the huge winners since it went public. This is way too much value for him. It just had a stock split and is trading at EBV +7, which is really, really high for him. There is better value elsewhere.

He never pays retail prices, and this company’s valuations are retail prices. 25 times for this year’s earnings is insane. Either he’s wrong and the company grows into its multiples or he is right and the company is worth only 15X earnings. Doesn’t see any moat here. He sees a company that was 1^st to market and had taken advantage of an arbitrage opportunity. Doesn’t understand why the US guys haven’t come in and slaughtered this company.

Has been a tremendous growth story. Well-run. The company has done an excellent job of increasing the average selling price for their product in the store. There is still a lot of running room from a space perspective. Trades at a pretty rich valuation of 24X estimated earnings. He just doesn't want any exposure to Canadian retailing. Prefers US retailers instead.

A darling stock and has really done well over the last 3-4 years. A great play on discount retail. This is one of the best ways to play retail in Canada. As an investor, you do get handsomely rewarded. The 2 for 1 stock split, effective today, is good and should offer a bit more liquidity and attract a lot more people. Sees some decent growth, not a significant amount, but doesn't think you are going to get hurt too badly by owning this.

Will split tomorrow. It is getting tougher and tougher for people to make ends meet so this is a good stock going forward. 25 times earnings, but growing revenues a lot since they are opening more stores. At some point this will tail off, but we are not there yet. The split could be an opportunity to nibble at it. Don’t commit a full position. Add to it if it weakens.

This has been a standout performer. Has had an excellent business model and has been growing its footprint. Tracks excellently in terms of screens, fundamentally and ROE. PE multiple has always been high. Thinks the company will continue to grow after the stock split. Take some profits here, but Buy on pullbacks.

This has been a great company. It always seems to be a little bit expensive, so finally on the last selloff he pulled the trigger at about 16.5X earnings and felt comfortable with that as an entry point.

A great business. They dominate the dollar segment. 900 stores. They will add 80 a year and there is a potential for a lot of stores. Their inventory system is impressive. Very high levels of return (20-25% ROE). The valuation is up there for a reason. There is some good upside over a long period of time. Add to it if it pulls back. It is in his top 10.

The stock split coming in November will not have much impact. The valuation on this looks pretty good. Trading at 1.1X PEG ratio and 22X earnings with a near 20% growth rate. Executing extremely well. A good name to own long-term.

The split makes it more affordable for retail investors. Research shows they tend to increase 2.2% after announcement, but before split and then 6 months afterwards there is no impact of the split.

In practice there is some merit to a smaller share price appealing to retail investors. The spit is a small part of the picture, however. 0.7% dividend. Great business model. The retail marketplace in Canada is slim pickings and some valuations are pretty extended. He does not see the dividend yield and growth he wants. US$ exchange rate is not helping them either.

Have executed really well and are obviously the leader in Canada. Right now the multiple is relatively high. Thinks they will be facing a few headwinds going forward. Reporting on Thursday so there will be some commentary regarding that. They source a lot of their product from the US, so the strong US$ is going to hurt them. Also, there is going to be an increase in the minimum wage in Ontario, which will hurt their costs slightly. Starting in 2015, the tariffs on imports from China will be going up.