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What did you buy? What might you buy??

  • Last Updated:
  • Nov 18th, 2017 4:40 pm
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Deal Addict
Jan 1, 2004
1517 posts
75 upvotes
Kanata
Was looking into adding on SBUX, LOW, DIS. Probably will add LOW. Concern with SBUX is if they can maintain growth rate to justify current PE. I guess very difficult to predict as with any other growth stock.
treva84 wrote:
Nov 8th, 2017 7:20 am
NA same store sales are still growing (2-3%) which is good, but yes they are expecting 6-8% same store sale growth from their international markets (i.e. China). They are also starting to open Princi Bakeries in their US locations, which will hopefully increase same store sales (https://www.cnbc.com/2017/11/07/starbuc ... -2018.html).

Nonetheless, I think SBUX's growth will slow moving forward as it continues to mature. I think management recognizes this which is why they increased their dividend by 20%, and are targeting ~ 12% increases each year. With that being said management is still targeting low double digit earnings growth moving forward (i.e. low teens down from low twenties).

Overall I think SBUX has a stronger moat than KMB and the compounded growth moving forward will be higher. I would consider SBUX a premium brand so perhaps KMB would be more resilient in an economic down turn, but looking historically SBUX earnings only dropped by 18% in 2008 and then recovered shortly thereafter. The dividend didn't start getting paid until 2010 but the payout ratio is fairly conservative despite the growth, so in a recession I would anticipate they would just slow / halt dividend growth, rather than cutting it. Time will tell!
Deal Addict
Dec 6, 2006
3791 posts
697 upvotes
Toronto
DuDe1411 wrote:
Nov 7th, 2017 4:15 pm
what's happening to AMD tomorrow? lol
boyohboy wrote:
Nov 7th, 2017 4:25 pm

Some guy left, heard from friends, should hit news soon perhaps.
The "King of Graphics" Raja resigned from AMD.
Newbie
Feb 22, 2009
37 posts
37 upvotes
Canada
Yesterday I bought some BCE @ $60.60
ENF @ $29.42
TD @ $73.40

I'm really thinking that ENF is going to pop again which should be some good gains along with great dividends.
Deal Addict
User avatar
Feb 3, 2011
1266 posts
189 upvotes
boyohboy wrote:
Nov 8th, 2017 9:35 am
The "King of Graphics" Raja resigned from AMD.
I don't think this is a big surprise to anyone. Everyone predicted he wasn't coming back from sabbatical because he was pushed out by the CEO.
Baaaaaaaaa!
Deal Addict
Dec 6, 2006
3791 posts
697 upvotes
Toronto
sharpshooter88 wrote:
Nov 8th, 2017 9:41 am
I don't think this is a big surprise to anyone. Everyone predicted he wasn't coming back from sabbatical because he was pushed out by the CEO.
Was he pushed out? He kinda took over half the company tho for the last couple of years. I was thinking it may have been related to the Intel partnership? The timing seems related.
So ~3% drop now...
Deal Addict
User avatar
Feb 3, 2011
1266 posts
189 upvotes
boyohboy wrote:
Nov 8th, 2017 9:54 am
Was he pushed out? He kinda took over half the company tho for the last couple of years. I was thinking it may have been related to the Intel partnership? The timing seems related.
So ~3% drop now...
The rumour was that he was quietly being pushed out, the whole sabbatical was just allowing him to save face. Who knows though. The rumour now is that he's going to Intel and announcement will be coming soon.
Baaaaaaaaa!
Member
Feb 26, 2017
302 posts
85 upvotes
KEY is up after an earnings miss and revising guidance down. I own KEY and shouldn't complain, but I don't understand...
Deal Addict
Nov 9, 2013
1901 posts
664 upvotes
Edmonton, AB
sfrancis wrote:
Nov 8th, 2017 8:54 am
Was looking into adding on SBUX, LOW, DIS. Probably will add LOW. Concern with SBUX is if they can maintain growth rate to justify current PE. I guess very difficult to predict as with any other growth stock.
Let's make the following assumptions - 1) EPS growth rate of 10% and 2) Dividend yield stays constant at ~ 2%. Based on the TTM EPS of 1.97, 5 years from now the EPS would grow to 3.17.

If the P/E remains fixed at 29, that's a 9.85% annualized return plus ~ 2% dividend (so, ~11-12% total return).
If the P/E contracts to 25, that's a 6.65% annualized return, plus ~ 2% dividend (so, ~8-9% total return)
If the P/E contracts to 20, that's a 2% annualized return plus ~ 2% dividend (so, ~4% total return)

I think the P/E will contract as growth slows, although I don't think it will contract to 20 unless there is a substantial bear market. I also think a 10% growth rate is on the conservative side. I think something like 6-8% annualized is probably most likely over the next 5 years, which I think is pretty decent for a wide moat company. Assuming SBUX remains strong moving forward, the longer I hold the better I'll do. As always, time will tell.
Member
Feb 26, 2017
302 posts
85 upvotes
muhammadfarooq wrote:
Nov 8th, 2017 10:12 am
Why is Linamar down 12%?
From TDDI:

Linama (LNR.TO), Canada's second-largest auto-parts maker, missed third-quarter profit expectations, as weakness in North American light vehicle demand hit the company's bottom line, BNN TV noted Wednesday. Its shares at last look were down 12%.

BNN noted volumes in the North American light vehicle market fell 7.7% in the quarter, and noted the company was hit by unfavourable currency exchange impacts. BNN said the weak quarter comes at a sensitive time for the North American automotive sector, which has found itself in the crosshairs at the NAFTA negotiating table.

BNN noted the U.S. Department of Commerce is pushing for a 'Made in America' requirement of up to 50% of every vehicle produced on the continent. Currently, there is a quota for overall NAFTA content in order to qualify as North American-made, but no country-by-country requirement, BNN said.
Deal Addict
Jun 27, 2007
3186 posts
512 upvotes
treva84 wrote:
Nov 8th, 2017 10:09 am
I think the P/E will contract as growth slows, although I don't think it will contract to 20 unless there is a substantial bear market. I also think a 10% growth rate is on the conservative side. I think something like 6-8% annualized is probably most likely over the next 5 years, which I think is pretty decent for a wide moat company. Assuming SBUX remains strong moving forward, the longer I hold the better I'll do. As always, time will tell.
what's the historical PE for SBUX? Multiples often collapse in corrections and expand in bull markets. While 29 is somewhat high, there is no other global brand in restaurants industry that is as recognizable as SBUX. They are in every major airport and locations are always busy. They have pricing power and folks would still come back...
After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: it never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!
Deal Addict
Nov 9, 2013
1901 posts
664 upvotes
Edmonton, AB
dlhunter wrote:
Nov 8th, 2017 10:41 am
what's the historical PE for SBUX? Multiples often collapse in corrections and expand in bull markets. While 29 is somewhat high, there is no other global brand in restaurants industry that is as recognizable as SBUX. They are in every major airport and locations are always busy. They have pricing power and folks would still come back...
I agree - brand recognition is huge.

Median PE over the last 10 years has been 29.

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