Founders have a vision, and those who are successful create an empire. Some of these companies, though established now, still have them as CEO. Many online platforms come to mind, such as Amazon’s Jeff Bezos, or Facebook’s Mark Zuckerberg. But there are other companies that are still led by their founder.
Canada has its fair share of entrepreneurs turned successful businessman. Another Canadian unicorn is Shopify, who has become a global leader in e-commerce. There’s also the family-run giants such as Couchetard, Dollarama and Saputo who’s founders still weighs heavily in decisions.
Here are the top companies still run by founders:
Shopify Inc. (SHOP-T)
A Canadian unicorn that’s grown to be the e-commerce leader. They provide a software platform for online commerce and retail POS systems. The have recently reported a sales growth of 45%, and it’s sure to keep growing as e-commerce spreads.
It's gone up so much that it's natural to have a pullback now, down $10 today. He can't see a specific reason, likely profit-taking. It is expensive. He wouldn't buy it now. SHOP needs to pullback to $350 before he steps in.
Evertz Technologies Ltd. (ET-T)
An electronic systems manufacturer based in Canada. Their technology is used for broadcasting and in the film industry. They pay a good dividend and are forecasting a 10% increase in earnings. Management is very good and they are a leader in the sector.
This stock is perpetually in the $16-$18 range, because the owners generally pay out earnings in the form of dividends. The yield is backed by a 76% payout ratio – a little high, but sustainable. Overall, a decent ROE and good cash flow, but he believes there are better opportunities in this dividend space. Yield…
The company that is synonymous with social media. They’ve had some scandals, but the technology is hear to stay. They also own Instagram and WhatsApp. They are huge in digital marketing and advertising. Instagram is being touted as the next big thing for e-commerce as users are increasing using it to find items.
He likes this chart. The up trend since early 2019 has been followed by a brief consolidation. A retest of $200 resistance would likely project back towards $220 or higher.
Twitter, Inc (TWTR-N)
The micro-blogging platform that is great for aggregating news and quick communication. Many experts say that the company is here to stay, but they need to update their monetization strategy. If they can figure out the advertising, this could be a good play on social media. Jack Dorsey, the co-founder and CEO of twitter, is also the founder of Square (SQ-N), a mobile payment platform.
Twitter has 336 million active users after purging a large portion of fake accounts and bots. Some investors were suspicious of this, but he sees this is an opportunity. Twitter has a very long runway--he's very bullish.
Netflix Inc. (NFLX-Q)
The online, on-demand content streaming service. They’ve moved into production of their own content, which has reaped big benefits. They are facing fierce competition with Amazon, Google and Disney but the company’s cash flow is improving. Their Q4 earnings were very strong, with 27% increase in revenue in the year.
Growth prospects despite huge PE? Yes it does, but it is trading at 88x this year's earnings. This doesn't work for his portfolio and he subscribes to Netflix himself. A great business model with huge retention, but they're facing competition with Amazon Prime, Google/Youtube and soon Apple. At least you'll get revenue increases when they…
GoPro Inc (GPRO-Q)
The company that created the GoPro action cameras. They shuttered their drone department to focus on video editing and their camera department. Their earnings have been having some problems, and a closer review is required of their product market as well.
Camera manufacturer. This is one of those really, really hot IPOs. This company has gone from nowhere to taking over the world with their action oriented cameras. Stock has doubled from its IPO. A very expensive valuation, so you really have to believe that they can continue to grow the business and sell a lot…
Nvidia Corp (NVDA-Q)
One of the biggest names in graphics processing units. They reached their high of $270, and they’re trading at $184.28 as of writing. Experts are expecting a move up soon. The stock price took a hit after missing on earnings. Since they are a chip maker, they coincide with the semiconductor market and tech sector.
This is a semi-conductor stock that is usually too expensive to own, he thinks. He thinks its peak may have come and it is dangerously over-valued. He would avoid it here.
Square Inc (SQ-N)
A mobile payment platform and merchant services aggregator. Their organic revenue growth is 53% year over year and they’re a leader in the space. The company is growing, with lots of potential still. The company’s founder and CEO is also the founder and CEO of Twitter.
Has a 1.25% in this. Really, really likes it, because it's a disruptor. But it's expensive. It's on his shopping list.
Paycom Software Inc (PAYC-N)
An online payroll and HR technology provider. They also provide data analytics. They’ve had a good track record of beating earnings. However, they are trading at 30-40 PE and is not cheap.
The chart looks great and they have been a consistent earnings beater. He likes the fin-tech space, but this is a smaller player. They also do data analytics. Over 90% of the date on servers globally has been put there in the last 18-24 months. It is not cheap with a 30-40 PE.
The company that is a giant in the information technology sector. They’ve transitioned from selling physical items to software as a service. We featured this on our “the Top 17 Enterprise Software Stocks”, stock list. They pay a nice dividend, and their subscription base means good recurring revenue with high margins.
An unbelievable 10-15 year turnaround. A wonderful business. His buy price is $125. Keep your eye on it. Firing on all cylinders. Cloud infrastructure growing like crazy, as is the legacy Microsoft suite. Business model has evolved well to subscriptions. Reasonable multiple, phenomenal company. Wait for a pullback.
Alphabet Inc (C) (GOOG-Q)
The conglomerate created by Google. A good stock to hold long-term. They’re facing their own scandal in the EU with anti-trust concerns but the fundamentals are great, and they dominate the cloud space.
One of the largest companies in the world, but there is a political head wind they are facing. Longer term, he believes the ad revenues will grow and this is a world leader in the space. He would look for a pull back to enter into a new holding.
Dollarama Inc. (DOL-T)
The Chairman, Larry Rossy, who led the family run Quebec-based dollar store to an internationally recognized brand stepped down from the company in June 2018. However, he still holds majority stakes in the company and remains the executive chairman. The company is still in the family, being headed by Neil Rossy.
(A Top Pick Mar 11/19, Up 16%) He'd continue to hold it. Thinks it will get back to the recent highs.
Saputo Inc. (SAP-T)
Lino Saputo, the founder of the company, remains the executive chairman of the global cheese manufacturer. The company grows primarily from mergers and acquisitions. They are a leader in their space and are the biggest producer in many countries.
Hasn’t looked at this in a while. Prior to this year it has been doing very well. He has very little exposure to consumer staples. Would prefer being in more cyclical areas such as financials, consumer discretionaries or technology. Technically he doesn’t find the stock very exciting. Fundamentally, it’s trading at around 20X earnings with…
Alimentation Couche-Tard (B) (ATD.B-T)
The fabled Canadian convenience store is still run by the founder and chairman Alain Bouchard. They continually add value for investors, and are growing through acquisitions. They are also a major distributor of gas and their integration of acquired service stations have been going well. They were largely spared from the pull-back last December, and are hitting their 52-week high.
He thinks it is quite safe. There is always risk on new acquisitions, but he believes in their de-leveraging strategy.
The most popular e-commerce and cloud computing company. Their cloud business continues to grow and everyone has shopped on them before. One thing to note, Amazon’s PE is quite high.
An unusual pick for him: Amazon doesn't pay a dividend and trades at a massive 70x forward earnings. What works for him is that Amazon has a huge future ahead. It's increasingly an advertiser; it makes a lot of money in Prime memberships; it pioneered cloud computing which is still in its infancy. He finally…
Boston Beer (SAM-N)
A leading brewer of beer. They’ve won more than 500 awards, and they have a huge market share on the craft beer sector. They recently jumped following a SmarTrend’s Buy recommendation.
Has been a lot of consolidation of beer companies globally and beer is starting to taste the same. They have a good quality product. Own about 20%-25% of the craft beer market. They win a lot of awards. Strong fundamentals.
Under Armour (UA-N)
The apparel company that’s most recognized by their sports line. Their stocks stumbled in 2017 and is now recovering slowly.
A higher growth story, but the whole group is at a valuation premium. Although the company is doing well today, if the growth model and valuations don’t come through, you are paying a lot today for what the company looks like a few years from now. That always makes her nervous in protecting capital.
Tesla Motors Inc (TSLA-Q)
The leader in electric vehicles and clean energy. They are getting rid of their stores and cars will be purchased online. A lot of people believe in Elon Musk and he’s delivered quite consistently. This could have some volatility, but in the long-term, it is a great name.
Never owned it. Worries about the owner. This moves up and down, so you can trade it, but it's been flat since 2017 and is now below its 200-day MA. There's also lots of competition which could be a big headwind. Also cash-flow negative with weak earnings. Troubles ahead.
Canopy Growth Corp. (WEED-T)
Bruce Linton leads the first cannabis producing company in North America to go public. They’re also the first cannabis producer that’s listed on the NYSE.The company has market support for capital, that has raised over $6 billion , with Constellation Brands taking a major stake in the company.
Canopy Growth (WEED-T) vs Aurora Cannabis (ACB-T) The battle of the titans. Both companies do good things. He favors Canopy as it has a lower risk diversified growth strategy in 12 different facilities. He also likes the deal with Constellation for further diversification. Aurora is expected to grow with the expansion of the new facility…
📦 Courier Services
An American multinational courier delivery company. They’ve pulled back quite a bit after they reduced their expectations for 2019. It’s been affected by macro events and the tariffs war. It is a quality name, with a buying opportunity.
Write downs caused by Amazon? He holds this in the large cap portfolio. The macro issues surrounding trade issues with China has impacted them. They will no longer be shipping for Amazon, but it was only a couple of percentages points of their business. He is excited about their involvement in e-commerce. Their cost model…