October 14, 2017

On Friday, the S&P 500 was up 0.1% and Toronto was up 0.4%.

AutoCanada was up 4.0% with no news during the trading day. But after the close, the company announced it was acquiring a large established Mazda dealership near Montreal. The family that built up and currently owns the dealership will retain a 10% ownership and will continue to be involved in running the dealership. It sounds like news leaked out on Friday during the trading day. Be assured that the Ontario Securities Commission takes that seriously and will be looking for unusual purchases that could be linked to insider trading. In this case adding one dealership is no guarantee that the stock price would rise. But anyone who knew about this deal and who bought it the past few days would be taking a risk doing that.

This is another indication that AutoCanada continues with its long-standing plan of growth by acquisition.

TFI Inc (formerly TransForce) was up 4.4% and had not released any news. This increase could be due to a positive recommendation by some influential analyst or other.

Linamar was up 2.1%.

BNN television hosts were giving thought to which companies might be harmed if NAFTA is scrapped. They listed Couche-Tard, Stantec, Shopify, CP Rail and one other (that I can’t recall) as having the highest portions of their revenue from the U.S. But they are very wrong to conclude that revenue from the U.S. indicates any dependence on NAFTA or even trade at all. Couche-Tard and Stantec earn most of their revenue in the U.S. but they don’t do it by exporting anything much. Stantec’s U.S. revenues would relate to staff employed in the U.S. And Couche-Tard’s U.S. revenues come from its U.S. stores, not exports. I am a bit surprised to see CP rail on the list. I don’t recall if they have much track in the U.S. CN rail has substantial track in the U.S. but again those revenues do not come from any exports by CN rail. Shopify might be at risk if there is a tariff introduced on their services sold into the U.S.

The Globe and Mail pointed out that the tariffs if NAFTA did not exist might not be very large in any case. (Then again, they might be…)