Wells Fargo came out with earnings before the open today. I think the earnings were quite good and the company is growing. Still the stock did not rise much. I sold 300 shares at $30.40 based on an order I had placed a week or so ago. But I still hold over 6000 shares and it is my largest holding, so I am not exactly bailing out here. I am hopeful the market will take better notice of the good results over the next few days. Also it may increase its dividend before long. I may place another order to sell a few more shares if the price goes up to say $32.
I’ve revised the rating on Dollarama to Weak Sell instead of Weak Buy. The numbers would really say don’t buy. But it is a very strong company and I was somewhat reluctant to rate it as any kind of Sell. But really the numbers indicate it is very richly valued. While it could continue to rise, I think it would be wise to take profits if you own this or to stand aside if you don’t own it.
Canadian Tire share price has slid a bit to $63.07. If I did already own a lot of it I would be buying. On a value basis there is no comparison between Dollarama and Canadian Tire, Canadian Tire is the better value by miles. Dollarama share are pricing in very strong growth. Canadian Tire share are pricing in very little growth. I suspect Canadian Tire could “release value” at will by such moves as selling store real estate and leasing it back or perhaps selling its credit card division. But Canadian Tire chooses not to do that. Dollarama meanwhile has apparently fine tuned the ability to generate profits from its stores. But it does not own its real estate and so any sign of decline or slower growth in its profit could torpedo the share price. In other words Dollarama is priced for near perfection. Maybe it will continue to operate to near perfection. But there is a danger it will not.