Reitmans (Canada) Ltd. (A) (RET.A.TO)

Nice dividend. They are in a bit of a spot. Invasion of US retailers and more people fighting over a shrinking pie. A lot of cash on the balance sheet so can fund dividend off balance sheet if they want to but would be smarter to cut dividend. Doesn’t know if they will actually do that. Not one he holds and he would wait for a bounce or get out of it. Are going to fall out of an index fund and that will create a headwind. At a nine year low.

Short. Brutal operating results and it goes on from there. They were one of the later reporters in retail and it was a bad quarter for the sector. Same store sales down 7%. May be kicked out of an index. ETFs account for 10% of the float and will unwind the positions. Thinks a dividend cut is inevitable.

Doesn’t like the name. Thinks they will not cut the dividend because they have cash on the balance sheet. Last quarter was terrible. Doesn’t see how they can turn things around. It is getting increasingly competitive in that space in Canada.

Look elsewhere. This is a challenged business. Apparel in Canada is challenged. Target is coming into Canada and HBC has been doing a good job and taking market share from RET.A-T. Dividend is not sustainable. He avoids this retail space. It is a long term challenged business.

For many, many years, this was considered a safe retail stock and was very consistent in their dividends. However, in the last few years, we have seen such a major change in the competitive environment in retail and this company has found itself in a very difficult position. At these levels, the dividend yield is telling you that perhaps the dividend is not sustainable or there is going to be some kind of turnaround in the underlying fundamentals. He doesn’t see the latter happening anytime soon.

Seasonally not a good time. So far holding up well. Not a good time to own it. Wait to buy until October.

Everyone thought they would be in trouble when Wal-Mart (WMT-N) came into Canada. It actually drove traffic to this company. Target (TGT-N) seems to be Wal-Mart, but with fashion and this would be his concern. He wants to wait and see what Target does to Reitmans’ numbers. Strong balance sheet and the dividend is safe for the time being.

Yield is good. Balance sheet is solid. Woman’s apparel is solid but he sees better opportunities out there.

Or Reitman’s (RET-T)? He wouldn’t buy either one of these. The market in Canada for retailing is pretty tough these days and they are having their problems.

Chart shows a cup formation with an attempt at building a handle. Now you wait for a spike in volume and actually the volume has picked up recently. This is a “wait-and-see” stock.

Clothing retailers – will do well for two or three years and then suddenly get clobbered. Prefers THI-T.

Done a fantastic job over the years. Target will be an impact on margins. Fashion/disposable clothing. This is an interruption and they will work their way through it. It is a very long term-hold.

(Market Call Minute.) Women's apparel is a very tough space to be in.

6.7% dividend and any stock with the dividend over 5% unless it is a utility or telco is dangerous territory. Feels the market is telling you the dividend is not sustainable. There are a lot of US retailers coming in, which may squeeze this company.