mardi 29 novembre 2016

On sale

That fucking life makes me mad. I have some slenderness on the side of my body, mostly when I do some movements. I think it’s muscular, but I’ve read all the symptoms of most cancers on the Internet and who knows, I may have some cancer and maybe I just have a few months or weeks to live.
Then, my 7 years old boy is having some difficulties at school. He probably has attention deficit and maybe that Asperger shit. He’s been to the shrink 4 times during the last two weeks to understand what’s wrong with his reading problems. Imagine that: a father is a fucking potential Pullitzer price nominee and his son has problems to answer a few questions after reading a short story.  
Isn’t life complicated enough like that without having a cancer and a kid that has problems at school? 
I know that I sometimes look like someone who likes to analyze things. But truth is: life would be so much easier, spending all day on a chair on a beach, eating coconuts and jerking off at the sight of pretty braless polynesian girls. I know that I return a little too often to that animal life, but come on, we all know that it would be real life. Oh my god, please, crash my plane on a tiny isolated tropical island  during my next trip from Quebec City to Toronto.
Speaking about easy things,  today, I received an email from a guy from Australia that offered me to get a free full access to his investing tool for free, if I wrote something about it on this blog. 
I’m on sale: If you want to give me a free copy of your book in exchange of a critic. If you have free diapers for a 5 months baby to offer me. If you want to put me on the board of your company in exchange of lots of money. Or if you want me to write something positive about you even if you're a pedophile. But be aware that I have the bad habit of saying exactly what I think about things, which means that even if I like you at the moment, I may very well start to dislike you in the future. I’d like to be eternally loyal, but sadly, it’s over my capacities.
I usually end up hating everyone and everything.

dimanche 27 novembre 2016

Dollar Tree (DLTR) and Dollarama (DOL.TO)

Here I go again: taking a crap with my laptop on my knees, writing another masterpiece of financial litterature.

Dollar Tree (DLTR) is one of my oldest holdings. I like that stock because it's very defensive and it's very well managed. However, the price they paid for Family Dollar was high and it changed a lot of things on the balance sheet of the company: The debt has risen a lot and the return on equity has decreased a lot. But there's a lot of potential with the stock and if the managers execute well (no reason to think that they will fail), this stock could perform well in the years ahead.

Even if I like DLTR, I believe that Dollarama (DOL.TO) is a better stock. In fact, DOL is probably the best stock in Canada and one of the best stocks in America right now. The problem is that it's very expensive.

Let's compare DLTR and Dollarama (DOL.TO), taking a look at different metrics.

DLTR
Forward PE: 20
Actual ROE: 16
ROE last 5 years: 29
Debt: 15 times earnings (high debt)
Annual Sales Growth last 5 years:  21%
Annual EPS Growth last 5 years:  - 4%
Beta: 0,6
Number of shares last 5 years: + 8%

DOL.TO
Forward PE: 26
Actual ROE: 84
ROE last 5 years: 33
Debt: 3,7 times earnings (low debt)
Annual Sales Growth last 5 years: 13%
Annual EPS Growth last 5 years: 31%
Beta: -0,32
Number of shares last 5 years: -16%

On most metrics, DOL is more interesting than DLTR. In fact, on every metric except for the forward PE, DOL is an incredible pick. I dare you to find something looking better on the market.

On the other hand, even if it's ROE has declined a lot and it's debt is high, sales growth and EPS growth are beginning to get much better with DLTR as the lasts results showed us. The market seems to believe that DLTR is going on the right direction given the recent rise of the stock. 

I don't understand why DOL has bought back so many shares given the price of the stock. But it looks like it helped the stock to achieve it's amazing performance.

All in all, I believe that, at their actual prices, both stocks are a Hold. But if there was a correction, DOL would be the stock to buy between the two.

vendredi 18 novembre 2016

Ce que les meilleurs achètent

Qu'il est bon de reprendre sa langue maternelle pendant quelques instants pour avoir la certitude d'écrire selon les conventions grammaticales d'usage. 

Ceux qui lisent Les Affaires se rappelleront peut-être de la chronique "Ce que les meilleurs achètent" de Bernard Mooney. La chronique ne m'a jamais incité à faire d'achats, mais c'est tout de même intéressant de voir les transactions majeures qui ont lieu chez les grands investisseurs. Parfois, on peut tomber sur une compagnie intéressante dont on n'avait jamais entendu parler au préalable.

Je reprends donc le flambeau.

****

Sorry. I have erectile dysfunction and I needed to confess about it in my native tongue.

Lately, I've wrote that superinvestor's buys and sales were not important to me anymore. It's true, but it doesn't mean that we can't discover something by watching what has been bought or sold by some billionaire going millionaire (like Bill Ackman).

Let's take a look at some famous names and their recent activities:


Warren Buffet

Many people find it very special that Buffet bought 3 airlines recently, given the fact that he said some years ago that it was a bad sector to invest in. I find it a little bit strange too.

On absolute numbers, a lot of money has been invested in these 3 companies. But in a relative way (VS the total value of Berkshire Hathaway) these investments represent nothing (all together, they represent about 1% of BRK). Do you really want to talk about something that has no impact at all on a performance? I don't.

American Airlines: 0,62% of Berkshire Hathaway
Delta Airlines: 0,19% of Berkshire Hathaway
United Continentals: 0,18% of Berkshire Hathaway

Of all Berkshire's major holdings, only Philipps 66 (PSX) was bought, with about 2,4% more shares bought during the last quarter. So, not such an interesting quarter.

Bill Ackman

This guy is an improviser. I don't think anymore that he knows what he is doing.

Air Products and Chemicals, a major position for Pershing Square, was reduced by 47% and Zoetis was reduced by 87%. I never understood what he intented to do with this stock. Looks like he didn't know either.

Otherwise, Ackman is still heavily invested in Valeant and he bought Chipotle Mexican Grill, another company going not well, which now represent about 4,3% of Pershing Square.

Pershing Square performance over the last year is simply awful. The fund went from 14 billion dollars last year to 5,4 billion dollars this year.

You're trying very hard to look impressive Bill, but truth is you suck dicks. You suck gonorrhea dicks.

Try to look on Google image. It's a fucking squirking dick. 

Lou Simpson

A lot of transactions for Lou Simpson during the last quarter. Almost all the holdings have been impacted by a sale or a buy. Brookfield Asset Management was reduced by 18%. Allisson Transmission Holdings (ALSN) was heavily bought (+31% representing now a total 7% of the fund) and Axalta Coating Systems (AXTA) and Sensata Technologies (ST) are two new buys, representing about 6% and 3,5% of the fund.

Daniel Loeb

A good investor (take a look at the value of his fund over the last years) who did a lot of transactions during the last quarter. Heavy buying for Facebook (+45%), Google (+38%) and Monsanto (+85%). Alibaba and Apple are two new buys, such as for Humana (HUM) and Visa.

Thomas Gayner

François Rochon seems to follow this guy closely, given the actual portfolio of both guys. Not so much movement in this fund in the last quarter (very light buys and sales). Among the small positions of the fund, Amazon (+74%) and Google (+34%) have been two of the biggest buys... but together, they only represent 2% of the fund.

However, check at this list of stocks that Gayner had in his fund: Berkshire, Carmax, Disney, Visa, Google. All stocks owned by Giverny Capital.

David Einhorn the gambler and Carl Icahn the only 19th century man still alive have done some transactions in the recent quarter but I don't find them too interesting. Michael Larson, the guy who runs the Gates Foundation seems to be a very prudent investor. He only added to his Berkshire shares (+15,5%).

You can see everything on www.dataroma.com.

mercredi 16 novembre 2016

Brexit and Trump VS the market

Until now, the Trump election has been positive on the market. Nonetheless, I've reduced some of my positions to stay ready for some abrupt movement. 

I think nobody could disagree with me: Donald Trump will surely say or do something that will make people nervous in the next months. Otherwise, we'll learn some crazy stuff about his past or his lifestyle. Some kind of plot twist like in "Chinatown" (the movie with Jack Nicholson made in 1974).

Please note that, usually, when I'm sure about something, the opposite happens. 

Talking about weird stuff, for instance, if we learn that Donald Trump smokes crack, like Rob Ford, there will probably be some manifestation on the streets. And maybe that Trump will get bumped. And then the market will go down.

Like many people said, Trump is like another Brexit. And, to understand what it could do on the market, let's go back in june. After Brexit was voted, on june 23th 2016, Priceline (PCLN) went down a lot. Here's the selling price of the shares:

1390$ on june 23, 2016.
1186$ on june 27, 2016.
1578$ on november 8, 2016.

If you'd buy PCLN on june 27th and kept it until november 8th, you would have had a 33% return. That's exactly what I wanted to do, but I didn't have a fucking token left at the time.

I've written about that stock before. It's a great stock with a good/great ROE, great balance sheet, good growth and the leader of the travel industry. I believe that, when Brexit was voted, people thought that air travel was going to be affected, like if Brits wouldn't travel anymore. Sometimes, people aren't more intelligent than chicken.

Let's forget PCLN, but let's think about a similar company with great numbers and a high valuation (CCL Industries, Constellation Software, Alimentation Couche-Tard, etc). I don't know if one of these will be hurt by Trump's politics. But I'm sure that a couple of great stocks will be affected by his wall, his protectionism or something else. The best stocks to buy in corrections are probably the 20-22 forward PE ratio stocks going down to 17-18 forward PE ratio.

So, you better start to follow a lot of stocks. The next year will be full of thrill. 

vendredi 11 novembre 2016

Giverny Capital update by the clown of Bay Street

2016 taught me to don’t care too much about superinvestors and averageinvestors sales and buys. Most of them are not that intelligent. In fact, many of them are not more intelligent than the average reader of this blog. Not more intelligent than me too, which means a lot because I'm a clown. I'm the clown of Bay Street. That's my duty to make you laugh with my thoughts about how absurd life is and how everybody will eventually let you down and how you spend your life working without any pleasure to get money that you save for later, waiting to be 65, old, tired and alone to use that money to pay for your cancer.

This year, I’ve started to take consideration of François Rochon’s picks via his fund, Giverny Capital. A few days ago, we could see the update of this fund via Whale Wisdom, one of the discoveries of 2016 (thanks to Etienne Pouliot, an obscure reader of this blog). I don't think that all the stocks are that interesting, but it's fun to look at them to see some stocks not that popular among investors.
There was not so much buying and selling for Giverny during the last quarter. Some little buying here and there and a large selling for Knight Transportation. 
And there’s a new buy which is Heico (HEI-A), an aerospace and electronic stock with a pretty high PE ratio bought by Merkel recently. It looks like Rochon likes to copy his favorite managers picks (Berkshire, Merkel and Sequoia Fund). The PE is high, the ROE is OK (16-17) and the beta is low. The sector is interesting too. So, why not keeping an eye on that stock?

Actual positions for Giverny Capital
Berkshire Hathaway class B (BRK-B) : 18,2%
LKQ corp (LKQ) : 7,8%
Carmax (KMX) : 8,4%
Bank of the Ozarks (OZRK) : 8,1%
Disney (DIS) : 7,2%
Ametek (AME) : 7,1%
Visa (V) : 4,8%
Merkel (MKL) : 4,6%
Union Pacific (UNP) : 4,6%
Wells Fargo (WFC) : 4,2%
O’Reilly (ORLY): 4,2%
Total 10 first positions : 79,2%

That website doesn’t show canadian holdings. I’m pretty sure that Giverny has a position in MTY Food Group... and they had a position in Dollarama in the past too. Is there anybody knowing what are their canadian holdings?

mercredi 9 novembre 2016

The Trump effect

Yesterday, like almost everybody on earth, I said to myself: "What the fuck is happening?" when I saw that Donald Trump was going to win the US election.

How could a guy say everything that he shouldn't say in politics and still get elected? I really don't understand. Usually, I tend to like to go against the masses in popular taste, but this time, come on, the guy is ignorant, vulgar and shows no qualifications for diplomacy. And he has the worst hair in the history of politics.

Around 10 PM, when Trump was almost sure to get the job, I said to myself that today would be a great day for bargains on the market. Because Trump is an unpredictable guy in the bad sense of the word and the market hates unpredictable events/people.

This morning, I took a look at pre-market prices and I saw that many healthcare stocks were on the rise. I mean on a serious rise. After looking at a few stocks, I realized that Hillary was an important part of the pressure on healthcare stocks.

Oh yeah. That bitch said she was going to protect the american people against unjustified healthcare price rises. And it looks like the market came to believe that Hillary was going to reduce the earnings of many healthcare stocks (or at least reduce the growth in earnings).

Fuck you Hillary.

The only stocks that are down a lot are some auto parts stocks (Linamar and Magna) and, to a larger extent, gun stocks like Smith and Wesson and Ruger that are down a lot (about 15%).

It may be the moment to buy these stocks.

Let's take a look at the unbelievable Trump effect on the market:

Healthcare stocks
Celgene: 11%
Allergan: 9%
Biogen: 8%
Pfizer: 7%
United Therapeutics: 7%
Valeant: 7%
Gilead: 6%
Eli Lilly: 6%
Jazz Pharma: 6%

Finance stocks
Bank of the Ozarks: 7%
Bank of America: 6%
Goldman Sachs: 6%
Wells Fargo: 5%
JP Morgan: 5%

Auto parts/gun stocks
Magna: -4%
Linamar: -5%
Smith and Wesson: -15%
Sturm and Ruger: -14%


lundi 7 novembre 2016

Tucows (TC.TO) beats the estimates once again

Probably that tomorrow, Tucows (TC.TO), will go down on the market. Why? Because once again the estimates were beaten (actual 0,45$ VS estimated 0,36$). And last time Tucows did that, the stock went down.

But, frankly, it may go down like a rock thrown in the water, that stock is still a fucking buy in my opinion.

Take a look at the recent earnings per share of the stock:

2013: 0,37$
2014: 0,54$
2015: 1$
2016: 1,65$ (my personal estimates)

Is it any stock out there that is not too expensive and that offers such a high growth and high ROE? That stock is selling at about 18 times this year's earnings. It's probably less than 13-14 times next year's earnings. And the ROE is higher than 50.

The only problem (which is not a major concern) is that the debt is still a little high. But it doesn't grow as fast as the earnings, which makes me feel good.

Like I feel after having some tasty marijuana muffins.

mercredi 2 novembre 2016

Don't fuck with Donville-les-Bains

That's it. I simply can't praise Jason Donville's work anymore:

1- His bad moves (Valeant, Concordia Shitcare, Delphi Energy, Patient Home Monitoring, Directcash Payments, Pulse Seismic, Biosyent when the stock was at 12$ and many others) no longer compensate for his good moves (Constellation Software, Paladin, CGI Group, CRH, MTY Food Group and a few others);
2- A large large chunk of his portfolio was invested in Valeant and Concordia, two of the worst stories in Canada in the recent history. Both CEOs destroyed an incredible amount of value in less than a year which is quite a shitty achievement;
3- Working with adjusted metrics made absolutely no sense. Donville looked at Valeant and Concordia using adjusted ROE of 20 or 40. Same thing for many others like PHM and CRH. Adjusted metrics create an illusion of profitability and performance when no money is made. Even when earnings are negative;
4- Last year, Jason Donville recommended Valeant as a top pick and went to BNN defending Valeant against Citron Research. Then, a few days or weeks later, he sold almost all his shares. When I discovered it, it made me pretty upset;
5- Now that things don't go well for Donville Kent, Jason Donville remains hidden, chosing not to face the heat.

I still think that Jason Donville is a good guy. He's also a good analyst. But surely not an incredible analyst. While most analysts are average in a consistent way, Donville has been a guy of extremes: some terrible picks and some great picks.

I'll still follow him and his picks. But I'm not a devoted fan anymore...

So I went on the Internet, looking to recycle the name of this blog with another Donville. I don't want to start another blog, transfer all the archives and try to convince people to go on another blog. It'll be long and complicated and I don't have that much free time with my two kids, my job, the bus and all that fucking modern life shit.

I couldn't find anything else than Donville-les-Bains, (Donville-the-baths) a small city in Normandie. It means absolutely nothing, but I know I'll never be disappointed by it, regarding investment.

So, this name should remain.