Canadian Tire Corporation Ltd (CTC.TO)

It's a decent long-term hold. A good operator. The debt-ridden Canadian consumer makes him nervous, so he's avoiding this space for now. As interest rates rise, consumers may spend less at Canadian Tire. The stock has been underperforming. There could be an entry point in the fall.

(A Top Pick February 22/18 Down 6%) The Helly-Hansen acquisition has brought headwinds to this stock. They have made acquisitions in the past, but this seemed strange and very expensive. The seasonal peak for this stock is January 11 to April 12, so he would not hold this now.

[What is P/B, like Canadian Tire's?] P/B is the price of the stock against its accounting book value, the money that's gone into creating the existing company. Some say it's an historic measure which get distorted over time, like a factory they own that's greatly appreciated in value. He uses it to measure how management uses shareholders' money, but you must also look at P/E and ROE. Canadian Tire is selling at a higher historic P/B because it's done so well, especially in the face of Home Depot and Walmart. They may have challenges online battling Amazon. Would like to see Canadian Tire at a lower P/B perhaps between 1.5x and 2.5.

It’s one of the few names in the retail space that has done quite well despite the current challenges to bricks and mortar. Their share price has outperformed the TSX since 2010-2011. They have diversified, with Canadian Tire stores generating 65% of sales, FGL Sports generating about 20% and Marks generating 15%. They have lots of cash,they have slowly loosened up the purse strings by raising the dividend and they have a very healthy balance sheet.

The season period is January to Mid-April. It was in an ascending bullish triangle and then it popped when they came out with great earnings. This is very positive. It has still has room to move higher.

He tends not to ‘step into traffic’ and initiate new positions before important news releases. Wait for the earnings. We have seen two or three months of very weak Canadian retail sales growth and so the stock has come down.

It had a very good run and had a bit of a dip here. The worst for Canada has been seen from an energy price perspective. The retail area is economically sensitive and hot hit.

1.7% yield. It is coming along. They have been increasing their dividend. The retail business is tough. There is lots of competition. There does not seem to be a long term sustainable advantage that gets them to the 5% yield that he likes to see. Also, there has been financial engineering like spinning out their real estate. He is passing and would not be considering it except at a bottom.

He has been looking closely at it for about 8 months. He will be buying it in the near future. You could call it consumer discretionary, but it is not overly cyclical. They have done a great job with the products they have put in the store. The balance sheet looks good.

This is one of the companies in his safety and value portfolio. Valuations are okay, 15 times and he does not expect huge increases in earnings. They are in great shape on a balance sheet. He has had no sell signals. They are showing good quarterly earnings momentum.

It got revalued. It benefits from Target walking away from Canada. They executed well and are good long term thinkers. He thinks it will continue.

Has had a phenomenal run. It was not affected by Target coming into Canada. The vast majority of what they sell is imported from the US so the fall in the Canadian dollar will squeeze margins are cause price increases. Be cautious on this one.

(These are the voting shares and have very little volume.) The company has done a great job in developing its market profile. Its performance, until just recently, has had a pretty good run. The continuing decline in the Canadian$ makes purchases of foreign goods more expensive for any importer in the retail business. He would look elsewhere for retail exposure. If he were going to own it, he would own the A shares, because if something goes wrong, the B shares would be difficult to get out of.

One of the few retailers she owns. They had benefited from the bad weather and she expects Q1 to look pretty good. Have announced that they are looking at monetizing their financial service subsidiary and are also looking at a real estate REIT transaction at some point. There are events happening and she would definitely hang onto this. She is personally buying it on dips.

When they announced they were going to spin off a REIT, while retaining 80 to 90% of the REIT, why did the stock go up so much since the value is already there? The psychological aspects of the stock market are not always rational. Investors are hoping for increased dividend. He doesn't own Canadian Tire, but the REIT might be interesting to him.