Loblaw Companies Ltd (L.TO)

Can see 20%-25% upside in the stock. Shoppers acquisition has a lot of potential for them to realize synergies and increase their operating profit. $55-$60 in 12 months. (See Top Picks.)

Acquiring Shoppers. Stock has already had a big move because they were spinning out some of their REITs. With this acquisition, they are even more fully valued. Although it is accretive, it is very big and a different business model.

Acquiring Shoppers Drug (SC-T) and this will be the biggest market share in Canada at 16%. Shoppers was getting into the food business and they will definitely be supplied by Loblaws and that is one of the attractions. This area is still very competitive and people are getting into each other’s business and that does not appeal to him. Even though this is the biggest, he thinks they will suffer from competitive pressures.

A bit pricey to him. Stock took off with the announcement of REITs disbursement. 15X earnings at this point with a stock that is going to give you about 8% growth. Would prefer others.

You can see the release of value in the chart. There is a turnaround story but it is about probabilities and odds. Take your money and go.

With their REIT, the real estate assets are better than the Canadian Tire deal. Other REITS have a portfolio, whereas the Loblaws or Canadian Tire, it's one thing only.

Hyper competitive sector. A one time cash hoard. Wait to see what their growth forcast is.

If we think there is going to be a correction, this could pull back. He doesn’t know if the REIT thing will go through. When a stock is this high, he is shy of it. He would look for a pullback. Don’t chase the strength.

There is the REIT story and that is the beginning of the pop. It was one sharp move and you have to get a correction in that. Don’t be surprised.

Had some operating issues but started to improve slowly. The latest stock jump is when they decided to spin out there properties as a REIT. Grocery business is very competitive. Have been implementing a new SAP system which is taking longer than anticipated. Has a lot of strong competition.

Weston is the parent of Loblaw’s. She prefers the pure plays and L-T is the pure play. They are unlocking the value in their real estate and that is giving a kick to the stock. She is concerned about what Target will do to the landscape and to L-T. She thinks it is a fairly safe company although not going to provide a great return. She would not be opposed to taking a little profit here. We do know Target will be launching this year with aggressive pricing strategies.

Announced a spinning off of their real estate. Will be a great investment. Stay away from L-T. The grocery business is not keeping pace. Still needs to create a strong brand. Target and Walmart will bring a lot of grocery space on line.

Just announced they are going to create a REIT with their real estate holdings. This created a big push in the stock price. If he owned, he would take advantage of it and Sell at this time. The supermarket part of the business is still not where it should be.

Downtrend from 2010 has been broken on news that they were splitting out some of their real estate. There are levels of resistance that he would like to see crossed at around $40. If this happened he would be bullish.

He prefers to stick with the leaders and you are probably better off with Metro (MRU-T) but if he had to pick one, he would probably go to Whole Foods (WFM-Q).

He bought this on the promise of a turnaround but the turnaround is still in progress with no end in sight.