The big announcement from Dollarama was that the corporate plans to construct a brand new distribution center in Calgary in the subsequent few years to fuel its growth in Western Canada. With shares now valued at an expensive price-to-earnings (P/E) ratio of over 35, this retailer may find it difficult to keep up its 2024 growth record going forward.
Meanwhile, dollar stores are specializing in streamlining their operations and shutting underperforming stores to extend their margins. Tariffs on goods from China and Mexico pose a significant threat to the profits of U.S. dollar retailers because these countries produce a big percentage of low cost goods that make up the vast majority of inventory at dollar stores.
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Why do CEOs sell their shares?
Some of the more interesting publicly available data on market sentiment includes insider buying and selling. (Not to be confused with insider trading – that’s, the illegal trading of a security using non-public information.) To create as much of a level playing field as possible, listed corporations must report when executives and board members make sales of their shares. They are sometimes paid in stocks to learn from preferential tax treatment – er, tax loopholes. As a result, they might sell stocks simply to put some money of their pocket. After all, yachts don’t buy themselves.
On the opposite hand, once we read headlines like “Insider Sales Hit Record Highs,” we expect a bit more about what those at the highest of the company food chain are seeing. Because if you should know what the massive players really think, it makes more sense to have a look at what they do with their very own money as a substitute of opinion polls.
Take Goldman Sachs. Its stock price soared recently, likely on speculation that a US federal government under Donald J. Trump will cut certain regulations in place because the 2008 meltdown. During his last term in office, Trump’s team had already cut banking regulations that were intended to maintain banks solvent in times of crisis. This step is sort of certain contributed to last 12 months’s banking crisis. It’s probably no coincidence that as of November 6, 2024, only 4 Goldman Sachs insiders have cashed out greater than $28 million in shares.
Meanwhile, Tesla CEO Kathleen Wilson-Thompson also took her probabilities and sold $34.6 million price of Tesla shares because the election. Clearly she sees something the remainder of the market is blind to! Add this data point as one other to support the “we are closer to the top of the market than the bottom” prediction we made last week.
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The madman against the greenback
If you have planned a visit to the United States in the previous couple of years, you almost certainly have not noticed that the reach of our Canadian dollar is not quite as wide because it once was. Canadian tourists will fondly remember the times after they could exchange their crazies for greenbacks at face value before heading south to (normally) find cheaper prices for a vacation or shopping spree. Those times appear to be long gone.
The Canadian dollar is within the red 1.5% since Trump was elected. It is now at its lowest level because the peak of the pandemic in early 2020.
