April 6, 2013 Comments

FirstService is updated and rated Weak Sell at U.S. $33.50 or CAN $ 34.01. I like it as a company and would be interested to buy on a speculative basis at $30 or less. It announced this week that it would eliminate its preferred shares. This could cause some selling pressure as the preferred holders are likely to sell the common shares that they will receive in early May. Also the outlook for the first half of 2013 is weak. The company expects very good results after that.

I will remove the preferred shares from the table above fairly shortly. I did indicated in the report on the preferred shares that it was possible the preferred shares would be redeemed.

It was a bit odd that FirstService introduced preferred shares some years ago since the move almost eliminated its common equity. It will now have a stronger balance sheet.

Friday was a down day in the markets although a late day rally eased the losses. In keeping with my April 4th comment I sold the remainder of my Walmart at $75.73 and bought more Toll Brothers at $31.17. I honestly don’t know if that was wise though Toll Brothers did end up closing at $32.16. My portfolio is perhaps dangerously concentrated in a few stocks at this point.

The composition of my own portfolio has been updated.

I saw a story that indicates that Target’s prices at its new Cnadian stores are higher than Walmarts. That is not a surprise. I mentioned in previous comments that with the lease purchase from Zellers and the renovations they did to those stores it did not appear that they would be a low cost operation. Also the story talked about empty shelves at the newly opened stores. That seems surprising and would seem to indicate that they don’t have the supply chain in Canada figured out.

 

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