Loblaw Companies Ltd (L.TO)

She likes the Shoppers acquisition because it plays into the aging demographics. In terms of food retail, square footage growth has less growth than in prior years, which is a positive for the grocery industry. Have been renovating their stores and putting new IT systems in, which is largely behind them. Focus now is to increase the dividend. They have also been buying back stock. Dividend yield of 1.5%.

Historically this moves very well in the summertime. Normally from April right through until October on a seasonal basis. Technically the stock is looking good and has been outperforming the Canadian market in the last little while.

Just completed their SAP. You are still seeing pretty rational environment in Canada of square footage growth. The issue with the grocery tillers (?) has been the West, and this company is very well positioned with a discount banner out west. They also have Shoppers which is doing a great job. Integration will continue to do better than what is forecasted.

(Market call minute.) He would definitely want to accumulate this.

Very impressed with what they have done with the business. Shoppers was a good strategic move. There are still a lot of synergies there, and thinks that they can continue to compound earnings double digit, in part operationally, and in part from capital return. Doesn’t expect to receive the same kind of return profile that has been seen in the past number of years. He will add more when the risk/return is better than it is today.

This has Shopper’s which provides a tremendous amount of cash flow into the company. They are paying down debt and opening all these new stores, which allows them to have some growth. He likes yield and safety, but also wants to have the growth. Thinks the company is positioning themselves to have another leg of growth. Dividend yield of 1.42%.

This has been closing some of their lower performing stores in order to increase margins. Because of the difficulty that Empire (EMP.A-T) is having getting the Sobey/Safeway merger completed, they have been cutting their price, particularly in Western Canada. That will continue to put pressure on this company. Not sure this would be the stock to own right now.

If positive on the US$, which he is, then you have to be positive on food inflation going forward, which is great for the grocers. Their Shoppers acquisition is paying dividends. He likes this and continues to hold. Valuations are little rich.

(A Top Pick Feb 27/15. Up 7.52%.) Still likes this. It’s acquisition of Shoppers a couple of years ago is going to continue to help the stock. There are good synergies. This is in the consumers staple space where money is starting to rotate into the more defensive area. Not the cheapest name, but money is still flowing in.

(A Top Pick Feb 10/15. Up 3.1%.) Likes the Shoppers acquisition they did a couple of years ago. They have met their synergy targets and their debt reduction targets, so going forward it is going to be a focus on buying back stock. In the grocery and pharma retail they have about a 30% national share, which is pretty attractive.

Chart shows an uptrend since early 2014 that broke a Top late last year. The resistance point in early 2015 was tested in a topping formation, and that became the neckline. We may find support at current levels of around $65. If it manages to hold that $64 area successfully for a little while, it may not be a bad trade. But be aware that if $64 breaks, it could get ugly.

Doesn’t own this because the valuation is high. A defensive and safe name, like a utility, that they operate with thinner margins. You are paying 20X earnings for this, which gives him a little bit of concern. He would rather pay a lower multiple for this kind of stability. Dividend yield of 1.5%.

From a techno analyse perspective this has given a new weekly Buy signal, and thinks that will end up carrying the stock allowing it to be held in his list. Earnings forecasted to grow 15% in 2016, against a 16.5 PE, so the PE to growth is 1.1 X, a bit more than you would prefer to pay. However ROE at 13% is pretty good. Have benefited from Target’s departure and are spending a lot of money revamping their stores. 1.5% dividend yield. He is potentially looking at selling his holdings.

Stock vs. Stock. L-T vs. ATD.B-T. She likes L-T as a leader in grocery retailing. They refurbished stores and that is behind them plus the movement to SAP. She sees very little expansion in grocery retail square footage in 2016 which means no increase in competition. She likes Shoppers. Drug retail is an attractive space due to aging demographics.

There has been a sell off across the market and L-T had had a big run up before the correction. He likes the company. In groceries you want to have your main brand and your discount brand. This is the only one that has a discount brand and an acquisition in play (Shoppers).