For fans of the movie “The Big Short” when Steve Eisman makes an appearance on BNNBloomberg it’s always a treat. Eisman recently came on to discuss his short thesis on Canadian Banks and dropped a tidbit near the end of yesterday’s interview. He is short Canadian retailer Canadian Tire (TSX: CTC):
“The only other position that I have in Canada, that we’ve never discussed, is Canadian Tire, which is one of my short positions.”
Canadian Tire has significant credit card portfolio. Which builds on his thesis about Canadian credit. And sees those problems showing up in Canadian Tire’s credit card business.
Real margin pressure from Amazon.
Why not short other Canadian retailors ? You can’t short everything!
They have a fairly significant credit card portfolio, which – if I’m right about the credit in the Canadian banks – eventually those problems will show up in Canadian Tire’s credit card business.
Steve Eisman, Neuberger Berman, Portfolio Manager
A quick glance of Canadian tires gross margins from Y-Charts, shows that margins have been trending downward, but these trends are somewhat cyclical:
From their last financial statements, the company had approximately $5.5B in outstanding credit card loans, not out of line from the last two years.
Canadian Tire closed yesterday at $210.20, down 0.90%.
Information for this commentary was found via Sedar, Bloomberg and Canadian Tire. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
Steve Eisman Short Canadian Tire
For fans of the movie “The Big Short” when Steve Eisman makes an appearance on BNNBloomberg it’s always a treat. Eisman recently came on to discuss his short thesis on Canadian Banks and dropped a tidbit near the end of yesterday’s interview. He is short Canadian retailer Canadian Tire (TSX: CTC):
“The only other position that I have in Canada, that we’ve never discussed, is Canadian Tire, which is one of my short positions.”
A quick glance of Canadian tires gross margins from Y-Charts, shows that margins have been trending downward, but these trends are somewhat cyclical:
From their last financial statements, the company had approximately $5.5B in outstanding credit card loans, not out of line from the last two years.
Canadian Tire closed yesterday at $210.20, down 0.90%.
Information for this commentary was found via Sedar, Bloomberg and Canadian Tire. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
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