Hudson Bay Co. (HBC.TO)

(A Top Pick Sept 19/14. Up 31.74%.) Thinks there is a lot left in this. It is misunderstood and people are afraid of it. Has 50% earnings per share growth. Thinks this is a play on the strength of the US consumer. More than half of their business comes from the US, so you have the currency tailwind.

Likes both the real estate and the retail side. Richard Baker has transformed the company completely. Has taken it into the US. You are getting better International exposure. It is also a better operator where you are getting the synergies from the operations and are coming in more quickly than expected. Rather than doing a REIT or something with a lower valuation, he is doing a lot of joint ventures directly with outside institutional players. There is probably $40 a share of asset value. Dividend yield of 0.88%.

This has become strictly real estate. It is going to be volatile and he doesn’t own it because of that. He would rather own a REIT rather than through a retail company. Trading at 27X estimated earnings which is pretty darn high.

He is looking at retail AND real estate in this name. The retail assets are effectively free, based on valuation. They have been very strong in putting together US operations. Their cost structure has improved. They moved into Germany and improved costs there. You are getting cheap assets on the dollar. Domestic retail is fine and they are picking up a little market share.

They are buying more stores, partnered with REI.UN and SPG-N in the US. They announced a cost cutting plan recently. They have a much high growth rate than other department stores. He has been buying it and it was a Top Pick last year.

The chart looks like it has been hit by a car. Support is coming in where resistance used to be. It should go back to the old highs. It looks okay from a technical point of view.

They cut a number of jobs today, mostly in Saks/Fifth Avenue. It has a lot of moving parts. It is retail and real estate. The shares are trading at a 40% discount to what he thinks the shares are worth. They have not announced the debt financing for their German acquisition. There should be expanding margins going forwards.

This could be an interesting play going forward. It popped mostly on real estate news. They made an acquisition that extended their operations into Europe.

This has been doing a lot of very exciting things. They have Saks and some very interesting real estate plays, which makes it interesting in the short term. However, there are much better names to be buying.

(He Shorts this one.) This has poor valuation and low ROE. His view is that the price has been supported by the possibility of them doing a REIT spin out of their real estate assets. Expensive on a PE basis. Trading at 13X EBITDA.

(A Top Pick Nov 6/14. Up 15.84%.) His primary reason for this was its real estate assets. But people shouldn’t take away from the fact that they actually have made a lot of progress in the retail side. They turned around the Canadian operations significantly. Their US and German businesses are pretty good. Thinks there is a lot of upside yet.

Thinks there is still more upside on this. The story has played out better than he had expected. It has always been about surfacing the value of their real estate. Richard Baker has a tremendous eye for value in real estate and a very clever way of thinking about surfacing that value. The stock works its way through the $30s-$40 two years out would be a reasonable level.

Doing great things to their stores, and it is increasing sales. Thinks the situation in Germany is very similar to what they had in Toronto. A few flagship stores with great property values that they have spun into a joint venture that they are really going to fix up and hopefully turn around sales. Also, have online strategies that they are going to focus on. Really the value is in the real estate. He calculates the NAV of around $35, and it is trading at a 25% discount to that. Yield of 0.75%.

They acquired a German company, and then sold off the real estate for basically the purchase price. He thinks management has been brilliant. They are now introducing some of the Saks stores into the Hudson Bay as well. It ranks in the 1^st quartile of his Safety/Value strategy.

This is flying high on its retail sales. Richard Baker is an extremely clever property/retail store man in the US. Has remade this company as a flagship of a new kind, which has just bought into Germany in competition with an Austriatn buyer. Dividend yield of 0.72%.