I have attended Dollarama’s annual shareholder meeting and here is my follow up up on my investment analysis published June 3rd.
Reposted from Seeking Alpha
By Brian Langis
On Wednesday, June 12, I attended Dollarama’s (DLMAF.PK) annual shareholder meeting and heard the first quarter results. On June 3, I wrote an investment analysis article stating that the company was a long-term buy mostly because of the pace of store openings, great management, and superior operating metrics. That thesis has been reinforced by the release of solid first quarter results. Unfortunately, the market didn’t respond positively to the results, shaving 5% off the stock after the announcement. For the first time since its IPO, Dollarama missed analysts’ expectations — mostly due to bad weather. Analysts’ estimates were for $0.67 EPS, while Dollarama reported $0.62 EPS.
It does look bad on the surface. Still, I was surprised by the market’s reaction considering the quality of the quarter. I believe this creates a nice opportunity to take a position. To better understand the situation and the results, I will explain the context first.