Loblaw Companies Ltd (L-T)

Consumer needs, not wants, is the place to be. Mid-teens PE ratio. A compounder of 14% over the last decade. Slow and steady.

Bought near $60, when it was being ignored. Don't buy the grocers right now, they're near the top having benefited from inflation. Nice 10% growth rate, not a bad 15.6 PE. Good story, but already reflected in the price. Lots of cheap stocks out there, pick one of those.

It is making lots of money since prices are up, even though margins have not increased. The concern is if food prices drop then they would have to increase their margins. Even though it is not cheap they are buying back stock. Too expensive to buy now but it is a defensive stock.

Consumer staples are defensive as we head into a slowing economy. Their discount banners are attracting customer traffic amid inflation. She likes their private labels with 25% customer penetration and strong margins. Great locations. Have benefited from the reopening as people return to the office. Drug stores will play a growing, bigger role in healthcare (Loblaw owns Shoppers Drug Mart and is well-positioned).

Very expensive, trading up near maximums. Be patient, let things fall to something that will give you a better rate of return.

Low profitability, balance sheet stretched. A more expensive multiple than the market, so avoid. Instead, try NWC at 13x and a bigger yield at 4.5%.