September 24, 2014 Comments

Wednesday was a good day for U.S. stocks with the S&P up 0.8%. But Toronto was basically flat.

Toll Brothers did not participate in the rise and instead fell 0.4% even as a report came out that new home sales (deliveries) in August were well above forecast. The problem is that orders for new homes have been weaker. Also KB homes reported what was apparently poor earnings today. We will see in the next few months how the orders for new homes go. In any case I expect Toll Brothers to have another two or three quarters of earnings growth due to orders already in the pipeline. I would think that would push the P/E down to attractive levels but I can’t be sure. Also a lower P/E will still not be considered attractive if the outlook turns to earnings declines.

Costco was up 1.7% today. And Walmart rose 2.0%. Possibly this was due to an announcement that it was getting deeper into banking by offering chequing accounts. Stantec was up 5.0% on news of a fair-sized acquisition in Quebec.

Melcor drifted a bit lower today.