On Monday, the S&P 500 was down 0.2% while Toronto was up 0.4%.
AutoCanada recovered 2.8% after it announced that it has, at the request of an activist shareholder, formed a Special Committee of the board to look into strategic alternatives and also possible changes to the Board composition. I have trouble imagining what other company would be a potential buyer given that there are no other publicly traded groups of dealers. Current management has been on the job only about two years. I think the Board will want to continue to let current management continue their work. Having made the argument that the company was adding value by consolidating dealerships under common ownership, will they now conclude they can add value by selling off dealers perhaps one at a time? Well, two firms have been hired as advisers (an investment bank and a law firm) and they will be paid probably in the millions of dollars each no matter what happens.
Toll Brothers was down 2.4%.
Statistics Canada released figure for sales of large retailers in April. It appears to be a weak report with a decline of 1.1% year over year. Some categories including footwear and a grouping of jewelry, watches, luggage & briefcases and also sporting & leisure products were down sharply (so much so that I have trouble believing this data). Fuel sales were up 13.6% presumably mostly due to price increases.
Trump’s trade war has probably shaved at least a full cent off of the Canadian dollar – thereby ironically making Canadian imports more competitive in the U.S. market place.