Hudson Bay Co. (HBC.TO)

(Market Call Minute.) This is not a name he would buy for his clients. Sales are nowhere to be seen. The real estate may be worth a lot more, but at the end of the day, it doesn’t seem to want to unlock it.

(Market Call Minute.) Good real estate, but not so good retail. He would stay away.

Can they compete with Nordstrom (JWN-N)? It falls on Nordstrom to prove that they can compete. Hudson’s Bay has had a sharp earnings fall off, and the stock remains quite a bit above its FMV. He would not be invested in this company.

A cheap stock and they are doing everything they can. Have made a lot of acquisitions and now owns Saks. They’ve expanded in the US. They are trying to focus on the higher end consumer, as opposed to being stuck in the middle and facing competition from the Walmart’s etc. A very, very difficult business and is obviously in secular decline.

The company is excellent, but it is a retailer. It had a big bump a couple of years ago, largely on the fact that it was seen as a very savvy real estate play. This has gone down over the last little while. It is going to be harder to see the pull-through from Saks in Canada. It is very, very hard in a bricks and mortar business, although this is one of the better operators out there. He would avoid this right now.

Has been surprised at how successful this company has been in being able to grow, make acquisitions such as Saks as well as European acquisitions. This, to him, adds risk to the situation, the further away you get from home. Also, the retail sector is always a pretty precarious place to be, because of Amazon (AMZ-Q) and the like.

(A Top Pick Nov 3/15. Down 35.3%.) Had bought this because it is a pretty massive discount to the real estate value. Still thinks there is probably $30 of value in the company when you combine the retail and real estate. The expansion into Germany looks like it is doing well.

This just seems to have disappointment baked in. It goes up and it goes down, but at the end of the day, if you are a trader you can make money. A lot of people buy on-line now. Not a fan.

(Top Pick Oct 9/15, Down 31.49%) He thinks there is easily $20 worth of real estate per share in the company. But it is priced so you get the real estate effectively for free. What they did with Saks and others are all great ideas. They are better retailers than they get credit for. He is staying with it.

Canadian Department stores have massive competition from specialty retailers and the Internet. This company is being as competitive as anyone in the big department store space, but are still vulnerable to specialty stores in the Internet. (See Top Picks.)

(A Top Pick Nov 5/15. Down 22.92%.) Chose this for its real estate upside, because it was becoming a global retailer developing a very good online presence and the low Cdn$ as most of their operations are outside of Canada. A tough company to value, because there are so many different moving parts. He believes they are doing all the right things and that patience will be rewarded.

(A Top Pick July 29/15. Down 30.49%.) A disappointment for him. Has been out of this for a while. Had been optimistic about the push into Germany, but things in Europe fell apart very quickly. He loves their business model in buying an asset, taking the real estate, and spending it off in JVs. That makes a lot of sense. However, when you have retail sales declining globally, along with the US$ pressure, that started him questioning what the properties were worth.

(Market Call Minute) The earnings and fair market value are dropping.

This company can’t get out of its own way. Department stores have been weak over the past year. Although this company has done pretty well in Canada, and has done well in Germany, their US operations have not been good. It has been very tough to value year-over-year. His sum of the parts valuation is $26.05, and he thinks this number is probably conservative. Excellent management. If you are patient, he thinks you will be rewarded.

This stock has an overhead supply of stock ownership, that seems to be in the high teens, so the upside for the stock is limited. Retail is a tough spot, especially with online sales. It is a very nebulous environment, and is a tough going for the old world, old fashion business.