July 11, 2017

Tuesday’s action had the S&P 500 down a scant 0.1% and Toronto up 0.3%.

Linamar was up another 2.1%

Couche-Tard was up 1.2% after announcing another acquisition deal. They post earnings tomorrow, Wednesday.

The big news tomorrow is expected to be an interest rate hike form the Bank of Canada.

A stock I used to have on the list Liquor Stores N.A. was up 5.5% after announcing it will turf its CEO and has named a new one with excellent credentials. This was no surprise after the Board was ousted in a proxy Battle. I was not a fan of the departing CEO Stephen Bebis. It was my impression that Bebis poo pooed the approach of the two men who built the Liquor Store Chain and had grand ideas. I understood he ws going to try to avoid competing so much on price but it looks like the company abandoned that plan some months ago and are now advertising low prices. It was also my understanding that Bebis actually lived in the U.S. and not near the Edmonton headquarters. The former chair of this company was Jim Dinning who I used to think was a great manager and leader. But he was unable to do much with Liquor Stores and also did nothing with Western Financial Group except sell it at what seemed too low a price. My perception is that Liquor Stores N.A. suffers from too many stores and too much lower cost competition. We can probably expect them to sell off the U.S. stores. (May as well take advantage of the low Canadian dollar and bring in U.S. dollars at a gain)  I don’t really see a solution to the too many stores in Alberta problem. It’s not nice trying to compete with Costco and SuperStore and some other discount stores.

CMHC released figures on new home starts for June. For single family homes, Calgary was up 31% versus June of last year and Edmonton was up 70%. I would not read too much into this since monthly numbers can be volatile and last year was a low point. Still, this looks like good news for Melcor Developments.

Ever since the financial crisis Canada has continued to build way more houses in proportion to its size than the U.S.