George Weston Ltd. (WN.TO)

Consumer stocks tend to do well in the last half of the year. From July to the present, it has been phenomenal. It is overbought at this time, but the seasonal tendencies can persist through to the end of the year. If this is a trade, he would recommend that you start to take profits in December. In the 1^st few months of the new year, consumer staples tend to lag the broad market and tend to be poor performers.

(A Top Pick Dec 11/13. Up 31.64%.) Even at today's valuation, it is putting very little valuation on the bakery operations. He feels they’re having a strategic review as to what they are going to do with the bakery operations. This represents good value.

Controls Loblaw's (L-T) which just bought Shoppers. Fantastic brands. A reasonably boring company. Has a fantastic war chest and has to decide what it is going to do with its money. Recently, it has just broken out above a pretty significant level of $91.

(A Top Pick July 18/13. Up 5.25%.) He is happy with this. He likes the power of this with all of its cash flows coming in. Has vast real estate holdings. 1.9% dividend yield.

(Top Pick May 26’14, Down 1.57%) He is looking to add to it. He has a half position.

(A Top Pick July 18/13. Down 5.97%.) Still likes this. Has done a marvellous spin out of real estate assets, and has more to go. Controls Loblaws (L-T)

Chart shows the digestion from the big run up of 2012-2013 is done. A lot of the indicators are really neutral, or are starting to turn up which is positive on a fundamental basis. Shoppers (via Loblaws L-T) will be fully into numbers into 2015. In a good space. Technical target is just above $100. That’s 20%-25%, when you factor in the dividend.

They will continue to participate with the things that Loblaw’s (L-T) is doing. Loblaw’s have been very smart in expanding into ethnic food areas. There is a lot of cross fertilization that they can do there. The bakery division is suffering a little bit with input costs, but feels they are addressing this by investing in plant and operations.

The market looks at it as a holding company and discounts it. Grocery business is difficult. They will never get the kinds of margins we used to see. It’s a wait and see with how they will integrate all the shoppers stores. There is the REIT business that grows. Owning the REIT might be better than owning WN.

(A Top Pick March 1/13. Up 13.08%.) The big thing that caught his eye was the technicals. Chart shows a big downtrend channel from last August. The little move up from mid-February is positive. He is looking for a time to add more to his holdings.

Loblaw’s is expanding with the add-on of Shoppers. It is a hyper competitive market with razor thin margins. Thinks the cost synergies with Shoppers are probably conservative. He owns Loblaw’s. This is an entry point.

(A Top Pick Dec 4/12. Up 24.89%.) Sold half his position at over $80 in order to take profit. He is inclined to get rid of the rest of his holdings at around $76.90 and then pick it up again later.

Their revenues are levered to food prices so be careful. We are seeing some disinflation in food prices. Grocery stores have a hard time with margins when food pricing is coming down. He has virtually no exposure to consumer staples.

Grocery business in Canada has become much, much more competitive with Wal-Mart (WMT-N) coming in. This is an area where everybody is manoeuvring for position, and it is going to be hard to keep margins up.

Right now we have a very competitive landscape, particularly in Ontario. Loblaw’s (L-T) is recovering from a few years of a large capital spending program. Thinks there will be some efficiency in this. The pullback in the stock price is a real opportunity. Have a lot of cash.