Removal of Dollarama from Growth portfolio

  • Company has seen 2 consecutive quarters of declining same store sales growth rates
  • According to the company, this trend is expected to continue
  • Company has decided to limit price increases as a result of more competition
  • Stock is still trading at over 25 times earnings compared to only 14 times for Canadian Tire
  • The projected earnings growth rates are similar for both Dollarama and Canadian Tire
  • Canadian Tire offers much better value relative to their earnings growth
  • Dollarama’s share price has rebounded 7% from its recent low, making this recommendation a little less painful

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