Dollarama Inc. (DOL.TO)

There is some M&A activity in the states involving dollar stores. We haven’t quite made a higher high. Watch to see if we continue to make higher highs and higher lows. He has no strong view here.

Looked at this quite hard. Because it is a low dividend payer, it is not in his portfolios. They are in a growth mode and he sees good growth for the next 3-5 years. On his watchlist. This is a decent entry point.

This company has a great outlook. He has been watching and watching this one, but has not been able to pull the trigger on it. Always seemed a little bit expensive, but they keep surprising him and the earnings keep growing very, very nicely. He would like to be able to buy it at 15-16 times earnings.

This was a name that had seemed expensive, but the earnings just crept higher, and they have done extremely, extremely well. Earnings moved up faster than the price and the PEG ratio is at 1. It has moved down to near the 50 day moving average, and he would be comfortable owning it.

(A Top Pick June 26/13. Up 25.64%.) This story really hasn’t changed. Best in breed Canadian retailer. Has monopolistic pricing powers.

Likes the chart. Hasn’t dropped below 200 day M.A. 19 times PE level, but the growth rate has started to go up again. It is showing up in his screens now.

This is a retail stock with a lowest common denominator. The lower-cost items seem to be the least sensitive. Terrifically managed company. Has a little bit of headwind with the Cdn$ and minimum wage hikes, but she thinks they will sail through them.

(A Top Pick Jan 16/14. Up 9.79%.) Lots of room for growth geographically, but there is also room for same-store sales growth also. Very savvy retailer.

A great Canadian retailer that has been wildly successful. Management has done a fantastic job in exploiting this niche and building its business. This is reflected in the share price and he can’t buy anything like this that is trading over 20X earnings.

All time high today. This name is up there in terms of stretched valuations. Prefers US equities.

Loves this one. Still opening new stores. Have been cutting costs and introducing more sophisticated systems into their stores. Before buying, wait for their earnings report on April 9th. Have preannounced that weather has not done them any favours so there might be a weaker quarter. In the long run, they still have a lot of stores to open and they are doing the right things. Good management.

Have done an amazing job in the Canadian retailing sector. So far they haven’t had too much of a series competition coming in, although there are a few. There is still room to expand most of the stores in Canada. They’ll continue to improve efficiency by taking different payment methods. Well-run. Not cheap. Buy on pullbacks.

Some of these stores and some of the more discount type of stores, especially Canadian, are reaching and going above the historical valuation norms. For the historical average PE for this stock, you are looking at 20-21 times earnings. Stock today is at 24X earnings. Unless those earnings continue to power up a bit, he feels the stock is a bit overextended on its valuation. Prefers some of the more luxury type of brand names.

You want to get an idea of how far they can build out their locations. They will hit the wall eventually and that is where the growth rate slows down. They can probably continue their growth rate for 2 or 3 years but you need to get out before everyone else catches on.

One of those companies that Canadians like to second-guess. Every once in a while they miss earnings and people think it is done for. He thinks there is plenty of room left in terms of growing the number of shares and increasing the profit margin of each store. Store growth is there. Management knows exactly what they are doing. Market share is very impressive and they are becoming the dominant player in Canada. Every once in a while when they miss earnings and that is when you buy it.