lundi 16 novembre 2015

The price to pay for a great stock

Today, I've received a transaction receipt that informed me that my last purchase in US dollars had a 35% conversion.  Holy whore. It's so expensive to buy stocks listed on some american stock exchange... We're so far from 2011 when we could purchase 1,05 american dollar for 1 canadian dollar.

Dry your eyes my little friend. I know you don't cry for Paris. You, cold heart motherfucker, you're only crying because of the conversion rate. Even if it's hard for us to accept, we must understand that if we want a great ROE stock, we have to look south of the border. In fact, there's not so much great stocks in Canada. If you're looking for the Joel Greenblatt/Jason Donville recipe (predicable earnings + low PE + high ROE), you won't find a lot a opportunites in the country of Glass Tiger. You may rather take a look at the country of Paula Abdul.

Here's a list of a few canadian companies that have a ROE higher than 30 (I may have forgotten some, but there's not much more to be listed):

Constellation Software
Gluskinn Cheff
Computer Modeling Group

The list is short. More, on this list, 3 stocks are fucking expensive (CSU, CMG and DOL).

And here's a list of a few US listed companies that have a ROE higher than 30 (there are much more companies than this that got a ROE higher than 30):

The Buckle
Colgate Palmolive
Lockheed Martin
Novo Nordisk
CH Robinson Worldwide
Ross Stores
Strayer Education
TJX companies
Sherwin Williams
Dollar Tree

See that bunch of great US stock? Many of them aren't expensive at all (10-15 times earnings).

I'd rather pay a 35% conversion rate for a company which is selling at 14 times earnings, have a ROE of 40 than to pay 18 times earnings for a canadian stock with a ROE of 20.

No wonder why american markets are usually performing better than canadian market.

USA is the real shit.

2 commentaires:

  1. I'm curious what you're accumulating? Double down on existing names or looking anew?

    Thanks penetrator (love saying that)

  2. Both. Many stocks are either at their highest price or their lowest price. I'm looking at those at their lowest.