On Monday, the S&P 500 was up 0.1% and Toronto was down 1.0%.
Melcor was down 2.2% to $13.40. They will release earnings on Thursday. It continues to trade at just less than half of book value. Given the quality of its assets and its modest debt , this appears to offer excellent value.
AutoCanada was down 4.0% to $20.73. I have updated the report for this company. I agree with management that cutting the dividend was a rational move. I believe the high dividend policy of this company was a legacy of its previous Income Trust structure where earnings had to be 100% paid out to avoid income tax. But that high dividend policy was never a good fit for a growth-by-acquisition company.
The Q1 earnings report was better than I had expected. I had thought that the decline in earning per share would not be reversed until Q2 or Q3. Instead, due to acquisitions and accost cutting, there was a large increase in earnings per share in Q1 despite lower-same store sales. The Q1 report appears to illustrates that the company is profitable even with the Alberta recession.