September 27, 2017

On Wednesday, the S&P 500 was up 0.4% while Toronto was up a hefty 0.9%.

Canadian Western Bank was up 4.9% to $33.56. Just four months ago it had briefly dipped to just under $24 at the time that Home Capital looked to be circling the drain. It’s always scary to buy on dips but it can certainly pay off at times. I did not see any news to explain today’s 4.9% increase. Possibly some analyst has made a bullish call on the stock and that could be linked to the higher oil prices and recovering Alberta economy.

Speaking of dips:

The Bombardier preferred shares on our list were down 4.5% to $16.24. They now yield 9.6%. That’s tempting but Bombardier is a truly weak company. It is probably only by the grace of government subsidies and support that it has not long since declared bankruptcy. But it appears that government will continue to support it and so it will likely continue to pay the dividend on these shares. Still, there as no guarantees. I have about 2.6% of my portfolio in these shares and so I am not very tempted to add to that.

Couche-Tard was down 1.9% to $57.97. I believe that may have to due with Metro’s possible purchase of Jean Coutu since Metro might sell its substantial investment in Couche-Tard shares to pay for that. Such a sale would have absolutely no impact on the true value of Couche-Tard but could push the price down temporarily. I am somewhat inclined to buy on this dip but then again, I already have about 2.9% of my portfolio in Couche-Tard. I would be more likely to buy on a bigger dip. Couche-Tard has nothing close to the risk that Bombardier has. As Couche-Tard founder Alan Bouchard has said, Couche-Tard may not make planes, but it does make money.

Meanwhile, CN Rail was up 2.2% and Canadian TireĀ .and Boston Pizza were each up 1.7%.