On Tuesday, the S&P 500 was down 0.4% (modest compared to the decline of 1.1% in the DOW). Toronto was also down 0.4%.
BHP Billiton was down 2.9% in New York. This was due to lower commodity prices. Volatility is par for the course with commodity-linked stocks.
FedEx was down 2.0% but then after the close it reported an earnings gain and revealed a massive order for new planes.
Constellation Software gave back 2.5%.
Linamar was down 0.3% today to $62.62. Earlier in the day, I added modestly to my position at $62.10. It’s hard to say how the evolving trade situation is going to affect Linamar but the stock appears to be cheap and I am putting faith in the founding family which still runs this business to continue to succeed.
Toll Brothers was down 0.6%. And that was in spite of a report that showed that May housing starts rose 5.0% which was far higher than expectations of under 2%. And starts were up 20% from May of 2017!. Despite this growth, Toll Brothers and probably the other home builder stocks have been unpopular and investors have bid down the price they are willing to pay for the shares. Investors are presumably worried that higher lumber costs and higher interest rates will lead to a slowdown in housing starts.
The Canadian dollar is down to 75.3 U.S. cents. This has just made all Canadian imports cheaper for Americans and visiting Canada has become cheaper for Americans. Meanwhile Canadians buying goods in U,S dollars pay about $1.33 plus an exchange fee. I know if you use a TD debit card in the States, TD will tack on an unconscionable 3.5% extra for a total of close to $1.38. (I was going to say $1.365 but they tack on 3.5% not 3.5 cents)
The report for TFI International is updated and rated (lower) Buy at $41.30 (It actually closed today a bit higher than my analysis price at $41.60.)
On December 31 the stock was at $32.86 and I rated it a (lower) Buy. In February it slipped under $30. It’s Q4 report showed only a 4$ earnings per share growth. But then it reported Q1 results near the end of April and the stock has surged upwards.
The Q1 results were impressive in part because they demonstrated management’s strong abilities to cut costs in the face of revenue declines excluding recent acquisitions. The 56% surge in adjusted earnings per share in Q1 was also driven by a “weak comparable” in Q1 2017.
At its current price TFI may be fairly valued. Still, I am inclined to take some profits here and reduce my position. This will also give me cash which may be a good thing if trade wars continue to weigh on the markets.