November 19, 2015

On Thursday, the S&P 500 was down 0.1% and Toronto was up 0.5%.

The Canadian Western Bank preferred share bounced up 3.2% on a small trading volume. Melcor was up 2.2% but that was also on light volume.  Boston Pizza Royalties was up 1.5%.

Valeant had a strong bounce, up 15%.

Liquor Stores N.A> had about a 4% bounce earlier int he trading day as it announced an acquisition in New England. But it ended up about unchanged on the day, possibly because the market realised that it was only buying half of two (larger) stores and planning to build two more large stores in that area. The CEO of Liquor Stores actually lives in Massachusetts and has hired some (I believe) high-priced American executives in the past year or so. My recommendation would be that they sell the U.S. operations to this CEO and part company with him and his new American executives and get back to running the Canadian stores. Also, the dividend needs to be cut at least in half. Selling the U.S. operations might be timely, given the high U.S. dollar.

Hall of shamer, TransAlta was down 6.6%. At its current bargain basement price it might be worth considering as a highly speculative bet. I have not ran an analysis of the company.

The market was unimpressed with Bombardier’s deal regarding its rail unit. Apparently the deal is extremely difficult to understand and involved a high interest convertible bond, but where reportedly the interest will not be paid with cash but rather with additional equity in the rail unit. Perhaps the Bombardier B shares will react more favorably after analysts have some time to digest the deal. The Bombardier pref share that we have on this site rose 6.0%, which I think makes sense as this deal presumably increases the chances that Bombardier will survive long-term and continue to pay the dividend on this preferred share.