Canadian Dollars Blog

With 2019 in the books returning an astounding 28.9% for the S&P 500 and the Toronto Stock Exchange's S&P/TSX Composite index up 19%, there was a lot to cheer about for investors in North America. This was a remarkable year considering a lot of the doom and gloom that fell on markets in Q4 of 2018. A lot of pundits were calling for 2019 to be the year that the 10-year bull run would take a massive correction, but that certainly didn't happen despite the year making a lot of news that would arguably have made markets shakier than they were. I hope a lot of you readers were invested as it was a year to make a lot of easy money. Unless of course, you had invested in cannabis-related stocks. All this said, a correction could happen.  We never know when it could happen but for those with a long-term investment horizon should not be fearful of a recession or pull-back in stocks.  Take only the risk you can afford to take and stay the course. For something a bit on th...

Like a phoenix rising from the ashes, I intend to be back.  The Personal Finance space in Canada has changed a lot in the last 5 years.  There's been a rise of new robo-advisors and free trading from some places like Wealthsimple.  It's an interesting time to be an investor. Look for more content in the near future.

Is Torstar even cheaper now with the sale of Harelquin ?  Saj Karsan over at Barel Karsan certainly thinks so. There are some remaining concerns we have even with the recently proposed sale: Torstar debt levels are really high Print/Newspaper revenues are in decline  What will management do with the newly acquired cash?  They hinted at paying off the debt but what if they don't use the money wisely?  Hopefully they don't invest more in print! That said, Harlequin will sell for 455 million, Torstar debt is 178 million, some quick math will reveal that 277 million in net cash. Here's some quick numbers: At today's stock price of 7.53, the market cap is approximatey 600 million. Pre-Harlequin announcement, the stock price was around 6.50 which valued the market cap at 517 million. The sale of Harlequin (pending approval) will add 277 million in net cash, yet the market cap of TS has only risen by 85 million. Does the market believe that Tors...

Here's what we're reading over at Canadian Dollars: Albert Eintein's Timeless Advice for Investors :  “If I had an hour to solve a problem and my life depended on it, I would use the first 55 minutes determining the proper question to ask, for once I knew the proper question, I could solve the problem in less than five minutes.” - Albert Einstein Safal Niveshak offers these 5 Things to Avoid in the Current Stock Market .  Extremely humbling and a friendly reminder in a market that contains high valuations. We still believe that Microsoft (MSFT) offers a great margin of safety and are very pleased with their push into the Cloud.  Under the new leadership of the new CEO, we believe that a lot of the ground work is in place to revitalize the company. We highly recommend reading Modern Graham's Microsoft Quarterly Valuation .

Last year I was able to beat the TSX and DOW with my portfolio. The total return was about 25%. Not bad. I treated the portfolio very conservatively last year by purchasing a lot of solid dividend companies like Shaw Communications (SJR.B) and Utilities company Emera (EMA). I expect these companies to be held year over year and indefinitely as they can be easily DRIP'ed. Now that another year has begun, I have another $5000 to play with. At the moment I am focusing on deep value net-net type of companies. With the Canadian dollar currently trading higher than the United States dollar, it makes purchasing stocks on the Nasdaq and NYSE that much more cheaper for me. As there are no restrictions on what stocks can be placed inside a TFSA, I have added a few companies in the portfolio. Without further ado, these are the stocks that I've added since the new year: VVTV (ValueVision Media) GRVY (Gravity Co Ltd) CCME (China Media Express Holdings) SOLR (GT Solar Intern...

Here's an interesting business. Last year in May the company offered shareholders the option to tender their shares for $6.25. The stock has since gone on a tear in finishing up around $13-14 a share. The good news is that the company has been actively purchasing shares through a normal course issuer bid. The current normal course issuer bid will expire in May but I suspect the company will probably issue another one in the current year. If this happens, this will be a great catalyst for the stock, and ultimately for shareholders. As of Q1, the company has $9.3 million in cash. The current market cap of the business is $65.9 million. Some of the risks of this company are that the industry is highly cyclical. For example most of the revenue the company makes are in the winter months. Between the April and September months, the cojavascript:void(0)mpany usually operates at a loss. With a P/E of 12.59 it is slightly below the industry ratio of 18.9. I like the fact...

On August 2nd, I sold SINA for a decent return . Since then it has been on a wild ride rising to over $45.00 and then with the recent fears of a double dip recession, it has taken a beating. I'm going to patiently wait this one out and have put in a stink bid under $40.00 should it dip. I still view this as a good play long term, but I sold out earlier this month to lock in some gains. Patience is the key word here.

For the fiscal year ended June 26, 2010, Danier Leather (TSX: DL) reported year earnings of $1.58 per share. As their business is seasonal, a quarterly loss of 0.14 per share was recorded. This was down significantly from the same quarter last year in which they lost 0.47 per share. Although there has been quite a run up in the last several months, this one is still a very compelling buy. Here are some reasons why we continue to believe this one to be a hold. 1. Increasing sales and earnings From 2009 to 2010, EBITDA more than tripled to $15.2 million from $4.3 million last year. Despite the sluggishness of Canadian retail, this brand has still managed to increase sales by a decent 4%. 2. Share repurchase Management continues to believe that the stock is undervalued, in the last fiscal year, the company has repurchase 28.9% of the prior year's outstanding subordinate voting shares. Specifically, 1,352,700 voting shares were repurchased. This is nothing to sneeze ...

Been looking at this one. They are generating 1 billion in free cash and trading a fraction over 3x earnings. From this perspective the stock looks cheap. They also own the DRAM space. Unfortunately end of June, the CEO sold a sizable amount of stock (4.2 million) . What do you think? Is this one a buy? Is there something we don't know about?

You know that savers have an image problem when they're mocked on television. I'm not a regular watcher of Two and a Half Men, but while flipping channels I caught a bit of the show. One of the dorkier characters was giving the little kid some advice about saving money and watching his money grow - prudent advice. However, when he leaves, Charlie Sheen tells the kid how ridiculous that strategy that is - making the other guy out to be a loser. Since when was it uncool to be a saver? If anything it's probably cool to be a saver now than any other time in history. Why? Because everyone is out there saving so little, you'd be a leader and not just following the status quo. It's a shame that popular culture makes fun of those that save. I hope that people with some brains can see through this and realize the true importance of saving and not just to live life paycheque to paycheque if they don't have to.

As per the Globe and Mail this morning: Canada's largest telecommunications company, BCE posted strong profit growth of just over 70 per cent as it reported second quarter earnings on Thursday that were slightly ahead of analysts' forecasts... ...On the strength of the company's performance, Bell increased its common share dividend by 5 per cent to $1.83 a year and increased its financial guidance for the second half of the year. At yesterday's closing price of $31.60, the dividend yield on BCE is now an impressive 5.8%. Not bad for what I view as a defensive play in this volatile market. Plenty of good upside and excellent yield. What's there not to like from a dividend investor?

With Apple’s run in the last couple of years a lot of investors are probably wondering if there’s still fuel in the tank for additional growth. With the recent antennagate issue, there are some Apple loyalists that are noticing that their shiny Apple isn’t as bulletproof as it once was. The way Apple dealt with the antenna problem was viewed as arrogant and disingenuous. By dragging other ‘smartphone’ makers into the fold and claiming that all ‘smartphones’ have the same antenna issue is very troublesome. Up until now, Apple has focused on one thing - innovating ahead of their competitors instead of slinging mud at them. It’s worked well for them up and until now, so I’m not sure why they’re doing it - other than to deflect attention from themselves. Being customer focused means making products that people love (which Apple succeeds in doing). It also means taking care of them when things go bad. Is the solution to give out free cases the ideal solution? Time will tell. Th...

My first sell within my TFSA: bought: SINA at 37.56 sold: SINA at 43.17 I plan to deploy the cash into a high dividend stock. This stock wasn't intended for a long term hold either. With the recent run up in Danier Leather shares, I am considering trimming my position as well. With the stock up 78% year to date, I may consider taking 1/3 off the table and deploying for another use. Will report further.

Did you know that at Research in Motion (RIM), they have a rule where if anyone talks about the company’s share price at work, they have to buy a doughnut for everyone in the company? Apparently this rule has been in place since the first day that the company went public. The last time the rule was violated was just under 10 years ago when the Chief Operating Officer was caught mentioning the share performance right before a call with analysts. This mistake cost him 800 doughnuts. While some may view this as being insensitive to shareholders, I believe it’s a good strategy. There are a lot of fluctuations in the stock market and focusing and talking about the day to day ups and downs will distract the employees from the long term goals of the company. The company can’t prevent individuals from checking the stock prices on various finance websites, not encouraging people to discuss the stock price is a smart move. The street is definitely concerned about RIM’s future prospects w...

The Apple iOS platform is a brilliant one. It's fast and responsive nature make it an ideal operating system for researching information on the go. When connected to Wi-Fi or 3g, the device is even more powerful. The wealth of information that you can download in the apps is so useful that whenever I need to travel long distances, I no longer bring my netbook or notebook - I just carry around my iPod Touch. The following apps are my favorite financial apps that I find indispensable. 1. CB Mobile (Canadian Business) My favorite thing about this app is the financial news and opinion sections. It is updated regularly and like the bi-weekly Canadian Business magazine, it contains well researched and timely articles. 2. MarketWatch MarketWatch is an indispensable part of both my mornings, afternoons and evenings. When I need to know earnings results, I usually check here first. Also before the markets open up in the morning, MarketWatch has a good summary of what happened in Eur...

Those that follow this blog know that I'm a lover of technology. I'm quick to adopt the latest gadgets whether it's a new notebook, xbox, or camera when they're released. There's one area that I've been neglecting while I notice everyone else 'catching up' - the smartphone. Although I totally understand the utility and amazing features that come with owning a fancy smartphone, I haven't really bitten the bait. I can honestly say that I have been tempted though. So why the hesitation you might ask? As with most of my purchasing decisions I make them based on two main factors: price, and utility. Cost: The truth of the matter is, in Canada our cell phone and data rates are atrocious. We pay the third highest rates in the world and the mobile competition is a giant oligopoly. The fact that our regular bills are higher means that those that opt for smart phones will end up paying close to $100 a month on the data and phone services alone. This ...

Jae Jun of Old School Value has an interesting take on the whole EMMS merger investing arbitrage situation . While he makes some valid points I disagree with some of them. First off let me disclose that I am still retaining my position in EMMS and have voted to tender the shares. Should the tender not work, I'm not seeing much further downside in this stock as the activists could very well be getting Mr. Smulyan to offer a higher bid. It's clear that Jeff Smulyan is very willing to take the company private - the question is are we reading his hand correctly? I believe that he is willing to pay more than the 2.40 if there is dissent from the activists. Of course this is merely speculation as we don't have a view of Mr. Smulyan's hand. Only time will tell but the tender deadline of August 2 is quickly approaching. I'm holding my shares and will ride this one out. The potential further upside is potentially huge. Disclosure: Author has a position in EMMS acquire...

At what point do you get rid of your preferred shares? Suppose that in the depths of the financial armageddon, you were able to pick up some bank preferred stocks are ridiculously low levels. There was a period of time when preferreds were yielding 13-14%. While in many cases, this would be a warning sign, those that saw the blood in the streets and bought instead, were rewarded handsomely. Ironically enough, I bought these stocks for the sole purpose of being defensive. Now these very same preferred stocks are yielding about 6-7%. So from the time of financial armageddon until now, if you are still holding bank preferred, the upside you've received alone in capital gains can be anywhere from 60-80% (or even more). With the bonus of high yield that you're receiving, the question is - when do you decide to sell the preferred shares? Or do you just keep it indefinitely or until the bank retracts? What are some strategies in this regard? Do you hold or sell? I'm choos...

What a rough year it's been so far for stocks in general. I've been attempting to buy on the dips but have had an equal amount of successes and failures. Intrinsically RIM looks cheap and I bought after the drop last quarter at around 55. It's since recovered but it may take some time for investors to see the true value in this one. For my TFSA I started out the year fairly conservatively. I had kept last year's TFSA account half in cash and half in equities with ING. In hindsight this was not a great move as I only earned 4% last year. This year, I've moved my TFSA over to iTrade with the hope of taking better control of my destiny. In Jan 2010, I started the year off with 10,400 in my TFSA. I decided to spread that out evenly between 5 stocks: GRVY - Gravity Co Ltd Sponsored SINA - SINA Corporation DL - Daniel Leather EMA - Emera Inc SJR.B - Shaw Communications As EMA and SJR.B have DRIPs, I am reinvesting all dividends into their shares. These are long ter...

Let's look at some numbers shall we: Shares outstanding at end of quarter: 4,794,269 Cash: $32,307,000 or $6.738 /share Shareholder Equity: $57,379,000 or $11.968 /share The stock is currently trading at 8.20. The business is profitable. Last quarter the EPS was 0.48 diluted. Subtract the cash in the balance sheet and you have a stock that is ridiculously cheap. Surprised nobody else is noticing this one. Disclosure: I initiated a position at 6.50 and am currently still holding. This one has much more to climb. Glad to have this as a holding in my TFSA.