Canadian Dollars Blog

I've initiated a position in RICK's. It's the kind of industry that is very recession resistant much like the alcohol industry. In good times or bad, there will always be business at gentlemen's clubs. Trading at a low p/e with positive earnings growth, I have been accumulating shares below 4.50. Today I initiated a position at 4.28 and intend to hold this as it will likely be a great money maker for years to come. That said, if there is a sudden spike in price to 7.00, I would put in a stop loss to protect any gains in this volatile market.

I initiated a small position in Harry Winston Diamond today at 5.10 for two main reasons low P/E and low P/B. HW has no long term debt and they own plenty of high quality mines in Canada. With a recession, people will still be getting married and people will still be purchasing diamond engagement rings. Also, price of diamonds is currently undervalued compared with gold. I expect that diamond prices will be priced more accurately relative to gold in the future. I am buying this stock for a long term hold. Once we get out of this recession, and people start spending more, this stock should be ready for a good rebound.

A few more stocks came up on my screener today: Sterling Shoes Income Fund (SSI.UN) http://finance.google.ca/finance?q=ssi.un This one dropped a lot in price mainly because of the cut in dividends. Looking at their financial results, their year over year revenue has been up even though they've been scaling back their growth for 2009. The stock is basically paying out 40 cents per 1.54 (last day) closing per year of yield. Amazingly this stock is ridiculously cheap trading at a P/E of 2.83. Be warned though retail numbers have not been great as of late and I expect that there may be some further weakness in this one. Despite all that, I am looking for an entry in this stock and have put in a buy order at 1.40. Also, this stock is very thinly traded so if you are planning on buying, it will be difficult to flip this one. When the economy turns around I am confident that this one will trade at higher multiples. Generally speaking this stock is not followed by many/analysts and a...