October 16, 2017

Monday’s markets saw the S&P 500 up 0.2% and while Toronto was about unchanged.

Ceapro was down 4 cents or 6.3%. I have been very disappointed with what I view as poor disclosure at this company. It was always a speculative pick. When first added to this site last February 12, based on its results through Q3 2016 it was profitable. So it looked like the existing line of products alone, with growth, could justify the share price and if their research panned out that would add to the value. But in the three quarters reported since then sales on the existing products have fallen (with little to no explanation from management) and adjusted profits fell close to zero. The company has enough cash to carry on for some time but we now seem to be much more reliant on their research efforts leading to new products. It’s always possible that they will come out with exciting news about their efforts to develop new products but that could drag on for a long time. I am becoming less optimistic on this one. We shall see if there any good news in the Q3 results next month.

Couche-Tard was down 0.9% to $59.85. The recent share sale by Metro at $57.17 was apparently about 5 times over-subscribed. I had placed an order for 200 shares through RBC and was allocated none. It seems to me that initial public offerings and this secondary offering often seem to get the market excited with a scarcity premium.

Dollarama was up 2.5%.

Liquor Stores N.A. (no longer on our list) was up 2.3% to $10.00 as they have announced they are working on a possible deal to sell their Kentucky Stores. A couple of years ago I had thought they should maybe sell those stores to their America CEO (and turf him). It would have been more timely with the lower Canadian dollar at that time. I have not been following the company closely but I believe the profits are quite a bit lower than the dividend. I have thought for a long time that they need to close some stores as Alberta has too many and they face competitors with lower costs. Anything is possible, and they do have new management  which is good, but I would not bet on this company doing well.

Constellation software was up 2.2%.