Reitmans Ord Shs V.RET

Cad : USD

[Torontojay]

1 Canadian dollar can now buy you a whopping 72 cents American. 

Canada, we are rich!

[Lllennn]

purchases will depend upon market conditions and other corporate considerations.

[Lllennn]

They are cake walking this to private imo

[Lllennn]

They really screwed up, they had all the synergies  and magic, now it's all gone cause they played games for management and controlling interest probably cause they had to have it all imo not fact imo. It will be interesting to see how this plays out, even McDonald's earnings going down, now these guys have interest going down, with that CDN will continue to weeken and cash will

[Lllennn]

McDonald's is reconsidering its pricing strategy, after customers cutting back their spending took a bite out of the fast food giant's sales.

[nedstar71]

No doubt.  Not that that has anything to do with Reitmans mind you but no question their customers are pulling back and should be, their prices have gotten way out of hand.  A 10 piece McNugget 'value' meal with tax is well over $19....a lowly Big Mac meal over $15.  They pushed it too far and drove many away.

[Torontojay]

Big economic crash is imminent.  Yield curve is close to uninverting. Now is the time to be defensive and a time to have some dry powder.  Reitmans is in a bad spot here with retail that is currently getting pummeled and that's in nominal terms. It is even worse when you look at total volume transactions. The turnaround is a long time away.  Canada has become uninvestable.

[savyinvestor333]

   "Canada has become uninvestable.  "   As my portfolia is hitting an all time high with an over 15% return year to date. It's a stock pickers market. I am feeling no ill effects to the portfolio by holding a couple of losers right now.

[TheCount11]

Good for you!  Agreed that it is a stock pickers market.  IMO Stockhouse is mainly about the stock price "momentum". 

[nedstar71]

I'm not even sure it's a stock picker's market given the TSX index is up over 20% from the lows last November.  Throw a few darts and you're good.  Too bad I suck at darts :-( I don't see Reitman's getting badly damaged even in a recession as demonstrated in 2008-2009.  That isn't the problem here.  The problem here is the stock is becoming

[Torontojay]

Thats a backward looking statement. Say that to the people who invested in 1929 or March of 2020 or how about October of 2007? Stocks reaching all time highs! That's what happened prior to each of these time periods.  The stock market is not a leading indicator for what's to come. The bond market does a much better job at that.  

[flamingogold]

I wasn't around in 1929 but I can tell you some of my best winners today are equities I picked up during covid in 2020 like SRV.UN, BBD, CSH.UN, SIA, DGS. I say never follow the herd because the herd always goes over the cliff... always, Housing and rates are inversely related. I sold a property in the Spring of 2022. The last 20 years was bubblicious because rates were for many years at

[Torontojay]

I too did well investing in early 2020 specifically in energy  stocks. The valuations were very attractive back then. I believe a reckoning is coming south of the border that will spill over to Canada into 2025.  It's not just a gut feeling but it's premised on macro data that cannot easily be ignored. 

[flamingogold]

I should add that this has not been one of my better picks, actually a real stinker. I hold a very small amount in my TFSA as a speculative play. Where it stings is I sold 10% of my BBD shares to pick up this at $2.25 a few months months ago. The shares here have barely moved a penny but if I held my BBD shares I'd be up an extra $7000.

[savyinvestor333]

Yes I still hd this in most accounts but the trick is to be active. I hit a major milestone today in my TFSA    Broke the $300,000 ceiling  tome to celebrate. Been sitting just under since April

[flamingogold]

The TFSA is the greatest gift granted to Canadians, yet most use it as a vacation slush fund and hold dead end cash or GICs in it. Mine is north of 200k so congrats to you. Another double for me and I might consider a 7-8% dividend fund for a lifetime tax-free monthly income stream.

[savyinvestor333]

Thanks and the amazing thing is it is currently generating $12365.90 in dividends a year also. I top it up Jan 1 every year.

[flamingogold]

Mine is over 200k but no divs, mostly growth. But, my wife's TFSA which I manage also is just under 200k and pulls in about $1300 / mth in divs. I chose more passive investments for hers. If the economy were to slow hers will hold up better than mine.

[TheCount11]

Stockhouse Indicator Negative "Reitmans is in a bad spot here with retail that is currently getting pummeled and that's in nominal terms. It is even worse when you look at total volume transactions." Any data to back this up?  Where does Reitmans report TOTAL VOLUME TRANSACTIONS?

[Torontojay]

Ttm Sales are down y/y in nominal terms so by definition it is also down in volume too.  Take sales and subtract the inflation rate for the industry and you arrive at "real" sales. Put another way, this tells us the total number of transactions if we strip inflation out of the picture.   

[TheCount11]

I don't understand.  "Ttm Sales are down y/y in nominal terms so by definition it is also down in volume too." Be specific.  If there are no actual numbers what is your volume formula.  Then we can have a discussion because right now it seems like "Sales are down.  Less stuff was sold".

[Torontojay]

  If a company increased sales by 10% but inflation was 20%, did they really increase sales in "real" terms? The answer of course is not. 

[TheCount11]

lets focus on this "Ttm Sales are down y/y in nominal terms so by definition it is also down in volume too." Example A jewelry store did $1,000,000 in sales last year and $900,000 this year. One can assume this year they sold less rings based on revenues.  I am saying that might not be true.  1) They might have sold the same number of rings but with smaller diamonds. 2

[Torontojay]

sales = number of transactions * price per transaction  The price per transaction is manipulated by the inflation rate so we hold it constant. The best way to illustrate this example is a company that only sells one product. Let's say they sell dresses of the same type. If we don't hold the price of the product constant due to changes in the product mix then this argument wouldn

[savyinvestor333]

Cost of goods is another factor to consider. If they can get the goods cheaper they can sell less items but maintain or increase Profits. Lots to consider

[Torontojay]

Yup lots to consider. Sales is one thing and profits is another. I generally like to see sales and profit growth year to year and preferably above the inflation rate.   

[TheCount11]

Exactly!   Another factor I am concerned about are Q4 e-commerce returns for PENN.  Many competitors are no longer zero cost e-commerce returns.   PS if a customer buys something from PENN and returns it revenues have increased by $2.95 but volume hasn't changed.  The return rate for apparel companies with free e-commerce returns is around 33%.  

[TheCount11]

"The price per transaction is manipulated by the inflation rate so we hold it constant." What are you holding constanst?  Obviously it can't be inflation or the price per transaction.  Both change over time.  

[Torontojay]

The product mix changes. I'm holding the transactional basket constant. I.e, a company only sells one product, let's call it a dress. The number of dresses they sell is the quantity of dresses and the price of the dress fluctuates with the inflation rate. Obviously, in the real world a company's product mix changes over time. The same thing occurs when a company's inventory jumps

[TheCount11]

"The number of dresses they sell is the quantity of dresses and the price of the dress fluctuates with the inflation rate." This is another assumption.  Reitmans is in the fashion business.  Its not a utility.  There is not one price.  Mark ups and mark downs differ.  There are sales, liquidations, write offs and shipping revenues (which also change as the

[Torontojay]

I think you are missing the point entirely. I'm very much aware that the product mix can change.  The point is this:  A company can increase sales from year to year but the increase may be due entirely to inflation. Forget about the word "volume" or number of transactions. I.e, sales increased by 10% but the inflation rate was 20%.  Im more interested in real

[Lllennn]

This should be a wake up call for SH, I was right this is a flat tire announcement and every meaning full announcement ends up lowering share price. Another area that does not really show up in share price is the real estate and even tho it's basically zero within SH value, the real estate value needs to be adjusted down and the 14 million they report spending with probably be written off then

[Torontojay]

Exactly. The real estate argument means s*it all. If they have no intention on doing a sale leaseback then I won't pay it much attention. Shareholders do not get to see any of that cash through a special dividend anyway. 

[Lllennn]

You can rely on Reitmans " not to rely on Reitmans " imo

[nedstar71]

Maybe, but the McDonalds example doesn't have any correlation.  I used to eat there on occasion when I wanted junk and now basically refuse unless I have coupons....just out of principle.  It's outrageously expensive for the garbage it is.

[flamingogold]

No one can time a market, it's time in the market that counts. Waiting for a crash to buy is less profitable than missing out on the best days in the market. I know this won't change a bear's mentalilty as yours but this article, while a few years old, is nevertheless timeless and true. https://www.cnbc.com/2021/03/24/this-chart-shows-why-investors-should-never-try-to-time-the-stock

[Torontojay]

You can time the market as I did with real estate. Buy at the right time and get out at the right time. I called a housing bubble in 2021 and predicted prices would fall much to several naysayers who disagreed with me. I was eventually proven right and home prices did in fact fall.  Oh and btw the carnage is not over yet. I think the stock market and specifically the Nasdaq and the S&P

[Torontojay]

  Not bad timing with this post.  Some people have argued with me that the yield curve is no longer relevant. Sure it isn't (sarcastic) 

[flamingogold]

Corrections (10% declines) are normal, healthy market cycles. Crashes (30% or more) are not. Today's US selloff is just the froth coming off the top. The Nasdaq has been a crowded trade since 2023 with many hiding in just a few tech names. That is why it's seeing a 15% haircut and could easily enter bear territory (-20%) before it bottoms. But, it may be short lived. The FED will be

[Torontojay]

Hi Flamingo, you are looking at things with rose coloured glasses. How are you confident that a recession has not arrived or that it won't in the near term?  Nvidia is already down almost 30% from its peak so they are in a bear market and according to your definition almost in a crash.  The recession risks are elevated especially if the Fed is late to act. This is my biggest

[flamingogold]

TorontoJay, Nvidia is not the Nasdaq. Individual stocks fall separately. I expect the Nasdaq to fall into bear territory (-20%) and Nvidia could be double that before bottoming. But, rate declines by central banks will prevent contagion and it will be short lived. What is "recession in the near term" for you? 3 mths? 6 mths? 1 year? I've been reading recession for close to 2 years

[Torontojay]

Fair enough we all have our own beliefs.  My concern is the following:  Sahm rule triggered - check  yield curve almost disinverting- check  savings rate at historic lows - check  frothy stock market - check  Fed close to cutting rates - check  US hiring below pre-pandemic - check  US quit rates falling - check  initial claims trending higher

[Lllennn]

Ret should drop .40 to .60 cents ?

[flamingogold]

Not even close. I hope no one sold on your prediction.

[Lllennn]

Did you mean my ?

[flamingogold]

yep. No one else gave such a dire price prediction.

[Lllennn]

A 37th-floor luxury condo in the heart of Toronto’s entertainment district that sold for a $320,000 loss is an example of a condo market that hasn’t been this tough in decades, realtors and observers say. NO VOLUME? 1.90-2.00 volume IMO not fact imo.

[Torontojay]

I remember having a discussion with someone on Stockhouse that the Canadian housing market was in a bubble. The general push back I received was that immigration will keep property prices elevated. I of course disagreed with this individual.  Now here we are, with over 1.2 million new immigrants entering Canada over 12 months and real estate is getting pummeled in Toronto. Keep in mind that

[flamingogold]

TJ, that convo was not with me. Maybe you were talking to a realtor lol, which I am not. I agree with you on Toronto real estate aside from a few points. I'll stick with T.O. as that is my locale.   I've kept close tabs on the market for well over 30 years. I myself bought my first home in the late 80's just before the market crashed. I held for 8 years selling in 1997 and

[Torontojay]

You have to be careful here. If we are talking condo prices then I'd argue we are already at 2020 prices at the least and it's trending lower by the month. This is a significant decline which makes perfect sense because over 60% of these condo purchases were speculative investors. Now they are cash flow negative to the tune of  $-600 per month and investors are rushing to the exit to

[flamingogold]

Your are correct, I was referring to attached/detached homes and townhomes. This type of accomodation is holding up. Condos are a mess, that's where the majority of specuvestors are. As mentioned, every city, every location in a city and type of product is different. One caveat, I wouldn't rule out the Liberals pulling a fast one like lifetime mortgages or some other manipulated mortgage

[Lllennn]

 Very low volume so it is around $2 or less, it's just house holding it up, free market  would be much less or real value, they can buy a few thousand here and there but just false pump imo

[Lllennn]

DD here: Kurt Angle starring meme imo

[TheCount11]

Slight change to make it relevant A large number of streakers have been seen in Toronto's entertaiment district with a 320 pound man sweating and waddling is an example of an apparel market that hasn't been this tough in decades designers and observers say. IMO not fact.   

[flamingogold]

The challenge with McD is they raised their prices beyond what the average lower income consumer can handle and those that can afford to eat out still have taken their business to other full service chains like Chipotle https://ir.chipotle.com/2024-07-24-CHIPOTLE-ANNOUNCES-SECOND-QUARTER-2024-RESULTS

[nedstar71]

Exactly.  For me it woud be Qdoba, a similar but better version of Chipotle.  Actually costs the same or less to eat there than McD's