Canadian Tire Corp

I bought this stock first in February 2000. Since that time, including dividends, I have earned to date an average of 12.6% per year. Over the last 5 years, I have earned some 11.6% per year. However, over the last 12 months this stock has lost 33.5% of its value. This stock has been coming down since November 2007 and no one expects it to earn in 2008 what it earned in 2007.

All my following figures are for the 5 years ending in December 2007. Although revenue only advanced by 7.7% per year, the Earnings per Share (EPS) grew by 14.5% per year and the dividend was increasing at the rate of 13% per year. The closing stock price was increasing at a healthy19% per year. This is different from mine figures above as my figures are to date.

You could see problems to come by the end of December 2007 as the Operational Cash Flow decreased by 34% from the end of 2006, giving an negative average at -17% per year over the last 5 years. Also in December 2007, the Operational Profit Margin at 2% was way below the 5 year average of 6.7 %. Their return on equity at December 2007 was 13.5%. This is because the Cash from Operations was lower than the Net Income. You would want the opposite. This higher Net Income also resulted in a high Accrual Ratio of 22%.

Although they are clearly having problems at the moment, I am still holding onto my stock. Tomorrow I will at this stock to see if it is currently a buy or not.

Canadian Tire Corporation is engaged in retail sales, financial services and petroleum sales. They own Canadian Tire Store, Gas Outlets, Parts Source Stores and Mark's Work Warehouse. The Canadian Tire stores offer a unique range of automotive, sports and leisure and home products.

Its web site is http://www2.canadiantire.ca/CTenglish/corpidx.html.
See my spreadsheets on this company at www.spbrunner.com/stocks/ctc.htm.


This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on web site.