Dollarama Inc. (DOL.TO)

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.

Continues to like it. It is hard to find an investment in the retail world like this. A quasi monopoly. They are big and have lots of capital. Competitors aren’t good operators. Tones of room to grow in Canada. Announced aggressive buying back with extra cash. Generate a ton of free cash flow. Thinks they will increase dividends in a disciplined manor.

(Market Call Minute.) Great company. Always priced for perfection. Still growing. Had some negative same-store sales in December that they blamed on the weather. He would only Buy this on a dip.

He bought the IPO. This has pulled back because of Q4 and a comparison to Family Dollar in the US. DOL-T will continue to deliver a 10% square footage increase. Mid teens revenue growth. Organic growth through new stores and increasing prices on products. They are just starting to spin cash flow. Balance sheet should be clean by 2015. 0.75% dividend should be increased. It is a good entry point.

(Market Call Minute.) Feels there is still a lot of traction for them, but also there is a lot of competition. Would look to buy this one on a pull back.

It has been a growth story since it went public. There is probably still more to come as they open more stores. It is the kind of stock that will not do so well in a stronger economy. Would find it tough to buy here.

He prefers secular theme in web based retail. Then he prefers the high end and then the low end so he would be a shareholder here.