August 16, 2022

On Tuesday the S&P 500 was up 0.2% and Toronto was up 0.4%.

Canadian Tire was up 3.5%.

AutoCanada was up a hefty 7.4% to $29.86. It released the results of its “substantial issuer bid” reporting that it bought back 1.16 million shares at $28 for a total cost of $32.5 million dollars. They had offered to spend as much as $100 million. I don’t know if the market was excited by the fact they did not spend close to the $100 million. On August 2 the company had increased the maximum price it would pay from $25 to $28. So it appears to me that the reason that they did not spend anything close to the full $100 million is that not enough owners were willing to sell at $28. 

I commented when this offer was made that it was a sign of strength. AutoCanada is well managed and could have substantial upside. Currently it faces supply constraints but that also means probably far less pressure to compete on price. 

At this time it looks like my recent strategy of buying into the declining market has worked out.  But it leaves me vulnerable with very little cash. So, I will give thought to harvesting some recent gains especially in registered accounts. It would be prudent to do so. But emotionally it can be difficult to sell even a portion of my shares in a company that I expect to continue to do well. 

TD was out today with a 6.25% 5 year convertible debenture on North West Healthcare Properties REIT. Paying 6.25% and with the conversion price 22% higher than the current price. I have not looked at the financial statements but in general I think this sounds like a reasonable investment for those with extra cash that they would like to put into fixed income. These bonds can certainly trade lower but are I think very likely to mature at par in five years. And there is a chance of a capital gain on conversion.

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