There are really only a handful of traditional bricks and mortar retailers I would ever consider owning. Among these, Canadian Tire Corporation (TSX:CTC.A) tops my list, for a few reasons.
In this article, I am going to discuss some of the drivers behind what I see as a potential rebound in this retailer’s stock price, and why I see value with this stock today.
To start, I think Canadian Tire’s valuation, in general, has always contained an element of value since I began following the stock around five years ago.
Whether because automotive and household goods are viewed as "unsexy" or fear around Amazon.com Inc. and other major e-commerce players disrupting the space, Canadian Tire has seemed to always trade at a discount to other peers I follow in lockstep.
Today, the company tracks around two-times sales, which, when we compare with other large retailers, wee see a valuation discrepancy. I believe this valuation gap is unwarranted as I see significant value in the company’s portfolio of brands, its growing e-commerce presence, its private label brand, and the prime real estate locations which have been in place, in most cases.
The company also has a loyal customer base.
Right now, Canadian Tire is on my short list of value picks. I will continue to follow this stock and point out any screaming buy opportunities as they arise moving forward.
Invest wisely, my friends.
