Monday, 19 December 2011

Reitmans Position

Reitmans was founded in Montreal in 1926. The company operates 968 stores across Canada under 7 names: Reitmans, Smart Set, RW & Co, Thyme Maternity, Penningtons, Addition-Elle and Cassis (although I read somewhere that the company plans to close down the 22 Cassis stores and reopen them under the other names). Reitmans also recently launched an online store and has a quick ratio of 3.32 (MRQ) which is more than enough to cover its debt. The high payout ratio of 93.19% (TTM) is a concern but the company has been very consistent with dividends distributions. I opened a position in Reitmans today after it fell almost 7%. My entry point gives me a 5.55% yield which isn't too shabby. Retail stocks have been taking a beating lately but I'm always happy to pick things up cheap. I'm currently overweight in the financial sector so having more exposure to the service sector is nice. Besides, I shop at RW & Co so I might as well get some of that money back right?

-the Paperboy

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