Christine Poole Loblaw Companies Ltd L-T BUY Jun 08, 2018

For consumer staples, he likes to stay close to home. Very few competitors. Stock's done very well for him.

Loves the grocery sector, an oligopoly. Better growth prospects, better margins, but higher valuation in the space.

Wait for a pullback, given current highs. As Canada's economy softens, more shoppers spend at their discount banners. Shoppers are doing very well in beauty goods as they get out of the low-margin electronics; many provinces are allowing pharmacists to expand their role, which is another tailwind for Shoppers Drug Mart (that Loblaw owns). They are expanding their margins and guiding higher.

Unfortunately, tariffs mean consumers will pay more. Eventually it will cost people their jobs. Phenomenal awakening of raising prices and capturing margins. Valuation of 20x would make him sell, deploy profits elsewhere. See his Top Picks.

The ultimate winner in inflation. Tough business, low margins, competitive. He owns COST. Loblaw is well run, as are MRU and EMP.A

Thought of using it today as a Top Pick. Just keeps chugging along. His choice in the space, along with DOL.

Has held in remarkably well; considered a defensive name when markets turn volatile with risk of economic slowdown. Traffic gravitated to its discount banners. Pharmacists' roles have expanded at SDM, which also helps drive traffic. Plans to open more pharmacy-based clinics across Canada. Executing very well. Not inexpensive at 22x forward PE, wait for a pullback.

It holds a variety of grocers, including lower-end, plus Shoppers Drug Mart which performs well. Has owned this for 5-6 years. But it trades at 23x forward PE vs. historically 15-20x, so that's a caveat. Would still buy it.

Depends where you own it. If in a taxable account and you have to pay capital gains, he'd say no. If it's in a registered account, it becomes a very good question, and he'd say yes.

It was on its back forever, and look at it now. There's a lesson for all investors:  a lot of stocks take their time to shine. Still has a 10% growth rate, trades at 22x PE (kind of expensive, but WMT trades at 33x and COST at 45x). He thinks the whole space is pricey, and he'd put $$ into other areas.

Likes its positioning in food retail and its pharmaceutical business. Expansion of pharmacists' duties is helping traffic. Discount banners have really been benefiting from softness in the economy, and they have plans to expand the discount footprint. Acquisition of TNT, an Asian chain, is going well.