And Tuesday was another good day for the U.S. market with the S&P 500 up 0.7%. Toronto managed to be down 0.2%. The Canadian market has seriously under-performed the U.S. market this year.
Canadian Tire released its preliminary REIT prospectus today. There was no reaction in the Canadian Tire share price. Perhaps there will be a bit more reaction tomorrow after analysts get a bit more time to digest the numbers. I thought perhaps it was showing the real estate was worth slightly more than previous estimates. In any case the REIT transaction is pretty well priced into the stock at this point and so probably we can’t expect much more from the Canadian Tire stock price when the REIT hits the market which could occur with a month I suspect. Canadian Tire is planning to sell only 10 to 20% of the REIT and retain the rest. I’d prefer to see them sell more and cash in while the REIT market is still paying a lot for real estate due to low interest rates. Selling 10% of the REIT does (and has) surfaced value but it is really just financial engineering. Selling half or more of the REIT would be more of a true substantive transaction. Canadian Tire was also looking for some kind of bank partner for its huge credit card operation and that could give us another boost to the share price.
Today I saw that Liquor Stores N.A. was down under $15.50 so I added to my position in that company. I bought at $15.35. I only had a small position so decided to add to it. It is not one of my higher rated stocks but then again it is the highest yielding selection on my list and it gives me some diversification