November 23, 2021
The investorsfriend.com web site is down. This is due to the expiration of a security certificate. The new certificate may take a few days to get installed. Meanwhile, I will send a daily comment by email. The install of the new certificate is proceeding well. There were multiple steps to complete and I am now awaiting the final step to be completed by the web hosting service.
On Tuesday, the S&P 500 was up 0.2% and Toronto was up 0.15%.
AutoCanada was down 3.2% to $33.70. I plan to update the analysis soon.
Costco was up 1% to $545. This seems to be getting silly. 43 times forward earnings is awfully rich. In comparison Canadian Tire trades at 10 times forward earnings. Now, Costco certainly deserves a premium multiple versus Canadian Tire but 43 times versus 10 times seems drastic.
With this stock and some others I wonder if we are getting into a “nifty 50” mentality where some stocks are considered a Buy no matter how high they get. Where price to earnings multiples just don’t matter.
There was a Federal throne speech in Canada today to open parliament. From what I read there was little to no specifics on things that might affect the stock markets.
TD Direct was out with a new issue a preferred share issued by Canadian Utilities. It pays 4.75%. Given the low-risk that may not sound too bad. But if rates increase you could be stuck holding what might turn out a preferred share with a below market yield. And if rates decrease, Canadian Utilities has the right to buy it back at $26 after about 5.4 years. The buy back price drops slowly and bottoms at $25 after about 9.4 years. So, there can never be much upside here. But if it turns out that inflation returns to much lower levels and interest rates stay very low then maybe this is “okay”. Personally, I was not interested in it. And I see it has not sold out today. This may indicate a lack of investor interest.