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What do you guys think of Canadian Tire as an investment? What about Canadian Tire acquiring Forzani (SportsChek and Sports Experts)?

I just took a peek at the financial statemnents, and it appears that:

-current price: $61.95
-revenue growth as been pretty flat over the past few years
-p/e ratio of 10.5
-p/b ratio of 1.17
-$6 cash/share on the balance sheet ($750M)
-manageable long term debt (~$1.08B)
-cash flow positive (net income + depreciation/amortization-capex) over the past 3 years (maybe longer).
-do not appear to dilute shares
 

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I think Canadian Tire is going to be facing some stiff competition when Target and other American retailers enter the market in 2013. The Forzani buy gives them more brands with a stronger presence in the sports niche and hopefully helps them weather the coming storm.

They've always had pretty strong fundamentals even though the revenue growth isn't huge. They also just had a nice dividend increase. Overall it looks like a good value right now.

Here's an interesting article about the Canadian retailer's ability to handle the coming American invasion - http://money.canoe.ca/money/business/canada/archives/2011/04/20110419-160711.html
 

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Solid and Boring -- but that could be exactly what you're looking for.

The dividend is not high enough for me and I don't think acquiring Forzani will break barriers.

What I do like about it, though, is the fact that before they acquired Forzani, it managed to hit almost $69/share in Dec/Jan. Now, with Forzani, why couldn't that happen again?
 

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I think I'm kicking myself for not buying Forzani's when it was at $12. Man...

Truthfully, I don't like either...

Canadian Tire needs to go through some serious restructuring, they remind me of Loblaws a couple of years ago when they were trying to branch out into home products etc.

I remember hearing the crappy tire was considering selling groceries.

I don't think there's any potential in these large, do-everything retailers. You just know that these companies won't be able to do anything spectacular to improve either profit or grow revenues, Canadian market is also already saturated, and I doubt they would be able to make any in-roads internationally so where's the growth going to come from?

I think most agree, hence the seemingly fabulous fundamentals.
 

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The boat sailed away a long time ago on this one and I missed it.

I think Canadian Tire was ahead of the curve and was able to generate a lot of sales by buying from China... All sorts of merchandise that were mediocre to decent in quality but sold well.

Now there's nothing I see that would trigger much growth and competition is stiff.

Dividend is too low too just like everyone else is saying.
 
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