A humorous look at the companies that caught our eye, for better or worse, this week
Canadian Tire (DOG)
“Hey, Gary the Canadian Tire guy here. Before I show you this great new ergonomic snow shovel, I just want to say a few words to Spruce Capital, the U.S. short-seller that published a scathing report on Canadian Tire this week. Now, listen carefully. This company is my bread and butter, do you understand? If the stock keeps falling, smiley Gary is going to get upset. I have a lot of tools at my disposal – Mastercraft table saws, Yardworks log splitters, MotoMaster lug wrenches – you get the idea. I’d really hate for there to be some sort of ‘accident.’"
CTC.A - TSX
Business quiz! Shares of Dollarama fell after the retailer: a) recalled millions of light-up Christmas sweaters that short-circuited, zapping unsuspecting customers; b) pulled a talking Santa doll that, due to suspected sabotage at a factory in China, emitted a stream of expletives; c) reported solid same-store sales growth of 5.3 per cent in the third quarter, helped by a strong Halloween, but missed earnings estimates as profit margins shrank. Answer: c.
DOL - TSX
Reitmans Canada Ltd. (DOG)
You know when you put wet clothes into a hot dryer and they come out three sizes smaller? Reitmans investors know the feeling: Shares of the apparel retailer have been shrinking for years amid growing competition and changing consumer tastes, and they dropped another size this week after the company posted a 2.8-per-cent decline in same-store sales for the third quarter and swung to a loss of $23.1-million from a year-earlier profit of $8.9-million. With the Addition Elle and Penningtons plus-size banners posting disappointing results, investors are being hung out to dry.
RET.A - TSX
Just Energy Group Series A Preferred (DOG)
This is one stock investors probably “preferred” they hadn’t bought. Citing amendments to the covenants on its credit and term loan facilities, troubled natural gas and electricity retailer Just Energy Group suspended “with immediate effect” dividend payments on its series A preferred shares “until the company’s senior debt to EBITDA ratio is no more than 1.50:1 for two consecutive fiscal quarters.” Judging by the massive drop in the shares, some investors aren’t holding their breath.
Canadian Imperial Bank of Commerce
There once was a business called CIBC,
Whose earnings weren’t what people thought they would be,
With loan losses rising
It wasn’t surprising
That some folks thought this was a good time to flee.
CIBC - TSX