With the Dow down about 100 points at this moment, I would be inclined to consider buying as opposed to feeling at all panicky. Sure, the market may continue to fall and for that reason I am not in any great rush to grab bargains, but overall buying on dips makes more sense to me than the opposite.
U.S. housing prices continue to recover which is a definite positive for the markets.
Canadian Tire in particular continues to look attractive to me with a P/E ratio around 11 and especially the price to book ratio around 1.2. There are ways that Canadian Tire could “release” value if it wanted to by selling off its land and buildings to REITs and leasing them back or by selling its huge credit card operations. Its own shares would be a good investment for the company and it could do a major share buy back. On the other hand it may do none of that and maybe it is is going to suffer from added competition. I happen to think there is value there, but certainly no guarantees.
This morning I see they have announced they are buying Pro-hockey life for $85 million for 23 stores.
I’m a bit concerned that they don’t do some share buy backs instead of just acquisitions, but overall this is small acquisition and is probably a good move.
I’ll show my confidence by grabbing a few more shares today.