Investors Should Not Tire of Canadian Tire - CTC.A

More bloodshed, more bad news - and I’m not talking about Iraq. Global markets have been and are in full sell-off and panic mode. Oil is down, world markets are down, the dollar is down. There is a lot of bad news. Merrill Lynch economist David Rosenberg suggested that "we may be in the early stages of a consumer-led recession for the first time in 17 years." Depressing. Want some good news? Well, for one thing, Canadian real-estate is looking good, VMWare (and EMC) is pretty happy about their IPO, and for the open-source community, news of SCO getting an unfavorable ruling followed by a subsequent 75% drop in their share price was music to their ears (and money in the bank, for those that shorted them).

Whatever you do, don’t panic – don’t sell into weakness. Hold tight – and if you have the cash, perhaps pick up some battered blue chips. Timing when to buy is the real trick, but there should be ample opportunity as down-days will continue on.

A good solid company that has been hit hard by both the current market conditions and a flat third quarter is Canadian Tire. Check out Canadian Tire’s chart and other info on Google Finance. About a month ago they were trading around $87 and as of this writing CTC.A is trading around $73. Has Canadian Tire suddenly stopped being a good company? Not at all – and this represents good value at this price point. Will the share price continue to drop? I suspect it will trend down for a while, but long-term, this is a solid company and a solid stock and a safe bet. They have an awesome credit-card division and a retail business solid enough to put Walmart in check in the neighborhoods it operates in. Oh, and their website/online shopping is top-notch.

DISCLOSURE: I do not own shares of Canadian Tire though if I can scrape up some cash I will pick some up. Do your homework before you buy a stock!