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.
The stock is up massively. Recently it's been added to the TSX 60, and the closet indexers have to buy it. Whenever it doubles, they sell half. Have to think about the percent weighting in your portfolio. If it goes up quickly, it tends to go down quickly. An alternative to Amazon.
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.
They have a solid balance sheet and are well managed. It is a lumpy business. The stock has been in a narrow band for years and years. The dividend is not at risk.
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.
FANGs? None in the FANG space are good value right now. Amazon has a floor at $1650 and ceiling at $2125 -- with PE ratio of 60. Facebook has given a short term buy signal -- technical support around $187-$189 with 20-25% upside. Nvidia has hit close to full value near $180 -- he might…
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.
The social media sector, outside of Facebook, tends to have fewer levers to pull when things don’t work. Not his cup of tea at this point because it has a 40 times PE ratio after doubling in the last year. He would move part of the position into something else after the great gains. It…
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.
Expensive name. Trades at 88 times earnings. Q4 earnings were very strong. Revenues up 27% in the year. They are modeling earnings growth at 88%. If they can execute on their business model and growth flawlessly. Exposed to macro risk.
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.
Earnings coming out in a couple of days, right after midterm elections. There will be a lot of volatility. He is concerned with it showing signs of fatigue. There were two 10% back to back declines without huge volume. There is some sector turn over out of tech.
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.
(A Top Pick May 09/18, Up 32%) They are a leading in the Cloud and the their membership sales are strong. Software is now a service.
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.
It is a fine company. It is on his watch list. He does not own it because of his concern with regulatory issues. They have so much share of search that it attracts the attention of regulators. He anticipates the separation of YouTube from Google Search and that would not be good. Wait for some…
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.
Dollar General vs. Dollarama The dollar stores are a good ivnestment when the economy stores. American dollar stores are priced at a discount to Canadian ones. December's pullback was a good opportunity to buy, and she would be on a future pullback. Dollarama's same-stores growth has slowed and has always traded at a premium to…
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.
They continue to be busy, both in New Zealand and Australia. Their whole purpose is to grow by acquisition. It ranks 150 in the overall database of 700 stocks, so is roughly in the top quarter. There are other stocks that rank more attractively. As part of a portfolio though, you will do okay 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.
Circle-K is their brand. They are linked to convenience stores and gasoline sales. There has been consolidation in the gasoline retailer space and margins in the space have been great. He would continue to hold.
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.
Amazon vs. Disney. Both in streaming. Both have long-term growth potential. Revenues are growing above average. Seasonally, high-growth technical names can do well in the summer. So this tells you that, as a tie-breaker, Amazon is better for the summer.
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.
It has done a lot better than he ever expected. He has it in some client accounts. It has gone up about 11 times since it IPO'ed and is worth more than Ford and GM but only produced 10 million cars. He is going to sell off.
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.
He's avoided the weed space, because cannabis producers--being commodity producers--have very low profit margins. This is a gold rush now. Some companies will survive, but some won't. There are legalization challenges, especially about edibles. Canopy will survive, because Constellatioon Brands is its major backer, but doubts it can maintain its stock levels. Right now, cannabis…
📦 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.
It has to break $200 ($10 away), then $220-230. Transports are improving across the board, based on the start of a new 4-year economic view. He would add at these levels. He likes it here.