Toll Brothers is updated and rated Speculative Buy at $30.77. It is speculative because its earnings need to grow a lot to justify its share price. I have about 4.5% of my portfolio invested in Toll Brothers. I am not that keen to buy more but I would consider doing so if it dips to about $28. This stock is up 51% in 2012. We had rated it Speculative Buy at $20.42 at the start of 2012.
Liquor Stores N.A is updated and rated (lower) Buy at $18.40. This company yields 5.9%. It has done well , rising 8% since we added to this site last April 10 rated Buy at $17.01. And this is in addition to the dividend. It seems like an okay investment at this time. But it is not one that I particularly plan to buy.
Here are some additional thoughts on Canadian Tire.
Consider how it has done since way back in February 2000 when I first added it to this Site.
The following Table provides a comparison:
| February 4, 2000 | Now | Gain | Gain per year | |
| Stock Price | $22.90 | $66.59 | 191% | 8.7% |
| Yield | 1.7% | 2.1% | ||
| 10-year Government Bond Yield | 6.19% | 1.49% | ||
| Adjusted P/E | 10.3 | 10.5 | ||
| Adjusted ROE | 13.6% | 11.6% | ||
| Number of Shares | 77.2 | 81.8 | 6.0% | 0.5% |
| Price to Book | 1.40 | 1.17 | ||
| Assets | $3.17 billion | $12.7 billion | 302% | 11.4% |
| Book Value per Share | $16.34 | $56.76 | 247% | 10.2% |
| Rating | Strong Buy | (lower) Strong Buy | ||
Back in February 2000, we rated this stock a Strong Buy. Since then the stock has almost tripled, rising 191%. That’s a gain of 8.7% per year for a total return of around 10.5% per year counting the dividend. (So much for the tired and tiring mantra that “no one has made any money in stocks since the year 2000”).
Today, our rating is (lower) Strong Buy at $69.81. Considering the price is now lower at $66.59, that is pretty close to the same Strong Buy rating we had in February 2000.
The reason the rating is the same is that many of the ratios are about the same. The adjusted ROE is not quite as high at 11.6%, the P/E is very similar. The price to book is more attractive today. The yield available on a 10-year bond is dramatically lower today.
Canadian Tire has done a very good job of growing its business over the past 13 years.
These figures add to my confidence that Canadian Tire is a good investment.
The market however appears to see danger ahead for Canadian Tire. The market is worried about the impact of Target moving into Canada. There are simply never any guarantees. But Canadian Tire simply looks like it is priced below its intrinsic value.