On Wednesday, the S&P 500 was down 0.1% while Toronto was about unchanged.
AutoCanada was down 2.1% to $22.12. It will report earnings on August 4.
Oil is at $42.08. We may see Alberta-based companies decline in price if oil does not bounce back up. So, far our Alberta stock picks have not been much affected by this latest dip in oil prices.
Statistics Canada reported today that Canadian rail car loadings were down significantly in May. In part this was due to the Alberta fire. But the decline has been in evidence in all of 2016. The latest figures from the America Railroad Association show that the decline has continued into July although the decline is not as large in recent weeks.
I have now run some numbers on Heineken as an investment. It’s a great company with strong brands and would likely be a reasonable lone term investment. But it’s not cheap at this time and so is not a compelling Buy. Still, some might be interested for the diversification including currency diversification.
I checked the feasibility of buying shares on the European exchanges and found that the minimum charge at TD Direct was $175 rather than the $10 that I pay for Canadian and U.S trades. On top of that there would be fairly hefty fees for exchanging currency (such as maybe 1.5% over and above the official exchange rate). So, that would prevent most small investors from trading on non-North America exchanges. At least that is the case with TD Direct.
However, Heineken, like many non North America companies trades indirectly in the U.S. in U.S. dollars as an America Depository Receipt (ADR).
In the case of Heineken N.V., we can buy its shares as HEINY on the over the counter exchanges in the U.S. (In that case we are back to paying $10 trading fees) Note however that it takes two shares of HEINY to equate to one actual share of Heineken N.V. It appears to me that Yahoo Finance is showing a P/E level for HEINY that is exactly half the true P/E and a dividend yield that is about double. Yahoo Finance appears to mistakenly assume that one share of HEINY is equivalent to one share of Heineken. Note also that there is a parent company that also trades. Heineken Holdings N.V. owns about half of Heineken N.V. and presumably other assets but is a separate company. My analysis will be for Heineken N.V., not the parent holding company.
By the way, the fact that HEINY trades in U.S. dollars, in no way changes the fact that the underlying investment earns its money mostly in Euros. The currency risk would be the same as if the shares were purchased in Euros with the exception that buying in U.S dollars in a U.S. dollar account avoids exchange fees.