Dollarama Inc. (DOL.TO)

(Market Call Minute.) Great company but missed the last quarter and he would want to see a quarter before he stepped in.

Has been on his radar screen for quite some time. It never got to a valuation where he felt totally comfortable. Currently it is at about 22X this year’s earnings and 18X next years. He would like to get it a little cheaper because it is really priced to perfection. A little bit too rich in case they stumble.

This is in an uptrend with higher highs and higher lows. Doing quite well despite this being the period of seasonal weakness. Not the optimal time to play this. Technicals are saying it should still go higher. He would look to buy this more in October when retail in general does quite well.

Trading at nearly historical highs and some momentum players would say it is a good time to Buy. However, he would look at it as possibly the “greater fool syndrome”, buying at this high price and selling to somebody else at a much higher price. Not his kind of company.

Has always found it too rich for him. Great company. Very well managed. Still able to grow in terms of Canadian locations. Trading at 20X this year’s earnings and 17X next year’s and is just a little bit too rich.

One of the few retailers that are exposed domestically to what he likes. Fantastic growth story. This is a quasi monopoly business. They compete mainly with the moms and pops that are not structured well, nor organized. Recent weak quarter is a buying opportunity. His target longer-term target is $85-$90. Yield of 0.76%.

Fast growing company, opening so many stores across the country. It is expensive and they are using up their cash. At some point the growth will stop. If you want to own it, buy on weakness, but he always finds it too expensive.

Stock came off after they missed estimates. Company may have a little bit of a growth spurt happening. They are trying to take some stores down into Latin America. He wonders if they have too many stores out there.

1^st time in 15 quarters that they actually missed estimates. Retail landscape in Canada is changing so rapidly. Still thinks this one has some good growth years ahead of it. Well managed. A formidable competitor in their business. On a valuation basis it looks quite expensive to him.

The dividend is sustainable, and they are growing across Canada. He views it as a staple as opposed to a discretionary stock.

It is a great business. Technically, it broke a significant level of resistance at $63. Look at the angle of ascent. It has become overbought but it is not unhealthy. The old level of resistance is not cracked and he doesn’t think it will be.

Terrific company with a strong brand name. Clean stores. Always busy. His problem is the valuation. You have to really believe that it is going to continue to grow at these levels to afford a 25X multiple. If you own, consider taking some profits.

Doesn’t own because it is more of a growth stock and he is a value investor. Has rewarded its investors very well. He sees continued earnings growth, which should lead to higher dividends. Probably fairly priced here.

The time to get in on this was on the IPO. Feels it is probably now fully priced.

It is getting there and is interesting. On his radar screen. Earnings are growing by a multiple of 20 is too rich. It sold off with US dollar stores last month and so he is taking a good hard look at it. Very well run company.