As a knowledgeable investor I’m constantly on a search for new quality investments that hold the title of Enduring Value. I like them to pay dividends, have a competitive advantage, strong market position and sell great products/services that I can evaluate both as a consumer and investor.
The Canadian landscape for investments is limited at times and on numerous occasions I’ve thought to myself how interesting it might be for a privately owned company to go public so I can participate as an owner in the business.
What I thought might be an interesting excersise is to mention a few of the companies I’d be interested in if they were available as publicly listed companies and see what other readers thought of them or what companies you’d like to invest in that are currently not available.
Liquor Control Board of Ontario (LCBO):
When an investor thinks of a company with a competitive advantage or monopoly in the Canada there’s not many better than the LCBO. With the provincial government allowing the LCBO to operate within a political framework that allows such a monopoly this government asset is both profitable and a gem for private investors. I don’t anticipate ever seeing the LCBO for sale in my lifetime most likely because the political party that decides to try would be commiting political suicide. The monopoly might not exist indefinitely if the LCBO were sold but their locations, market presence and comfort with residents of Ontario certainly provides a substantial advantage over any future competitors.
I have no idea how profitable this business model is but with GoodLife expanding across Canada but this company seems poised to be successful in the future. With services in new well established buildings, a population demographic that projects the need for more physical activity and smart marketing campaigns to attract new members with limited competition GoodLife would be a company I’d be very interested in looking at both because of its strong brand recognition and great management team.
Cara Foods is the parent company for restaurants such as Harvey’s, Swiss Chalet, milestones, Kelsey’s & Montana’s and was previously a public company prior to being taken private in 2003. The company was profitable then and there appears to be no reason for them not to continue with addition of new brands and expansion to smaller restaurants in key locations. This company offers a diversified portfolio of restaurant chains that are successful in attracting customers versus competitors.
Shoppers Drug Mart (SC) has had a rough road in 2010 with many investors discussing the decision made by the provincial government in Ontario regarding generic drug costs & allowances and its impact on profitability. Rexall, a direct competitor to Shoppers, hasn’t spoken publicly to my knowledge, nor do they have to, but I would be interested as a shareholder of Shoppers in the company’s profitability and investable potential as a compliment to my existing investments. I often hold more than one company within an industry (insurance, banking, rail, etc) so drug stores likely wouldn’t be any different.
Ontario Teachers Pension Plan:
This one I’m dreaming “bigtime” about; but who wouldn’t want to invest in one of the most successful pension plans in Canada? The only way an investor could potentially invest indirectly into this pension plan would be to be a teacher (or married to one) but their senior management makes smart acquisitions and investment decisions for members and if possible I wouldn’t hesitate for a second to invest some portion of my portfolio in this fund.
Those are about 5-6 of my initial companies I’ve considered at one time or another in my Canadian fantasy investment portfolio; what companies are on your list?
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Hydro-Quebec! Absolute monopoly. Incredible upside to earnings growth if rates in Quebec are reset to market.
You could go to Fortis to get a monopoly chunk of the BC interior's electric grid and generation facilities (around Kelowna and the south-east), and you'd get the bonus of Terasen Gas. For liquor distribution in a oligarchy in BC and Alberta (plus some small US chains), try LIQ.UN.
For CARA, try Colabor (GCL), although the stock has been underperforming of later. For the pension funds, nothing quite works, but you could try Morneau Sobeco.
As for private companies not available, I'd love to have a chunk of the Jimmy Pattison empire: I'd settle for his Great Pacific Capital group. I would also would have liked BC Rail to have gone public, instead of being given (through out and out corruption) to CN.
Hey Jonny (long time no chat). Yes Hydro-Quebec should definitely be on everyone's list!
Thanks for the mentions Anon.