Empire Company (A) (EMP.A.TO)

(A Top Pick June 12/12. Up 45.8%.) They are shedding off non-core assets and will essentially just be Sobeys and the market is starting to understand that and will give it the valuation it deserves.

Safeway acquisition is good but valuations are bit stretched and it is a wait-and-see scenario as to how they integrate the new asset. If you are a long term investor there is still safety in the dividend and some growth potential. 18 month time horizon.

(Market Call Minute) Interesting after their acquisition.

Owns Sobey's and real estate, and movie theatres. A consumer non-durable stock, not economically sensitive, it has a good cashflow, a decent yield. It's the type of stock that investors want to own. Never going to be exciting, but you won't be hurt too much either.

Cheap on a net asset value basis but you could always have said that. Bumped a fair bit recently. Owns half of Crombie REIT. There is a margin squeeze in grocery. This is the one he would own in the food group.

Have done pretty well. Sobey’s has made some definite inroads in gaining market share. Metro Richeleu has done a particularly good job. These are good places to be for the time being but we have seen the prices increase quite well in the last while and he is not so sure it is going to be so robust going forward.

Now the food supplier for Target stores. A somewhat high volume/low margin business. Their big worry is Wal-Mart which is continuing to expand. Doesn’t own the stock but he is warm to it.

A conglomerate but primarily the business is Sobey’s supermarkets. They will be distributing groceries on behalf of Target (TGT-N). He is cautious on the whole sector.

Sobey family holding company has an estimated net asset value of $75 to $80 per share but the stock trades at under $60. This is a classic value situation in which rising dividends, a healthy balance sheet and undervalued assets will eventually lead to a nice increase in share prices.

Earnings next week. Sobeys. If they broke it up it would be worth $80-$85 a share in assets, so it is trading at 70 cents on the dollar. They raise the dividend every year and have done for over a decade. Are buying back stock, supplying some groceries to Target. You have to be patient for the market to catch up to what is happening.

(Market Call Minute.) Nice and defensive with a reasonable dividend. Good management.

This is a good hold for the long-term. Has been kind of dead money for the last 2 years but their earnings are growing and they are doing all the right moves. Have improved the technology and are adding new stores. They get zero value for the real estate in their portfolio but they are able to sell it to Crombie REIT (CRR.UN-T), which locks a lot of value for them. They are buying back stock and increasing dividends.