John O'Connell, CFAShoppers Drug Mart CorpSC.TOCOMMENTSep 06, 2013

(A Top Pick Jan 29/14. Up 4.98%.) 2.36% bond maturing May 24/18. He had liked the balance sheet and the bond has done really well.

(A Top Pick Jan 29/14. Up 2.96%.) 2.36% bond maturing May 24/18. This has rolled down the curve with a positive return of over 3%. It will continue to generate positive returns.

2.36% Bond Maturing May 24/18. ‘A’ rated even after L-T bought them. Good positive return over time.

(Top Pick May 16/13, Up 34.12%) He did not keep the Loblaw’s shares because he did not want to be exposed to food retailers. He is now sitting on the cash from this.

(A Top Pick April 23/13. Up 39.41%.) This was acquired by Loblaws (L-T).

(A Top Pick June 19/13. Up 27.54%.) Had not been expecting the takeout by Loblaws (L-T), but just bought this because it was a quality retailer generating a lot of free cash flow and paying down their debts.

2.36% bond maturing May 24/18. A company that you don’t get many choices to buy in the consumer area. Credit quality is good at A minus and the yield spread is attractive.

(A Top Pick May 16/13. Up 29.79%.) Sold his holdings in October because the transaction by Loblaw’s (L-T) involved quite a few shares being swapped and he did not want exposure to food retailing.

$61.29 is full value. Loblaw’s is fairly fully valued. There is too much competition, even if Target is struggling in Canada. Prefers THI-T but it is fully valued. Same with Canadian Tire or Sears. Dollarama would be a better entry point.

(Market Call Minute.) With this one, you are now riding with Loblaw’s (L-T). ROE is fairly modest on Loblaw’s and he didn’t think either one going to go any further.

Assumes deal will go through. No one was expecting this. SC is Loblaw’s way of getting into the neighborhoods instead of just having their big box stores. They bought a quality asset at the perfect time. Wal-Mart might have done it. Take the L-T shares when the deal completes.

Not trading close to deal price because there is risk that the deal may not close and there is a time value until the deal closes. Also L-T’s share price has come off since the deal was announced. He is in Canada Bread in this space. They will probably spin some of Shoppers real estate into the Choice REIT.

(Market Call Minute) Likes sector and company.