Loblaws: I Love You, I Hate You!

grocery

One of my first and worst stock investments was Loblaw (L:T). Which is doubly a shame because of how much I LOVE shopping at Superstore, one of the banners they trade under. Their President’s Choice line is fantastic (can’t get enough of the rosemary crackers!) and they have lots of items that you just can’t get in other stores. Plus, it’s one of the cheapest places for groceries, especially because of how they match competitors’ ads.

I bought it because it had a decent enough dividend, somewhere around 3%, and the stock had been beaten up. And I always LOVE to buy a stock when it’s come down in price. One of the more reliable ways to do well with stocks is to buy when the price dips. Many investors have said you need to buy when the market is fearful, and sell when the market is bold. I have definitely seen this theory in action in the time I’ve been watching stocks.

Well, that theory didn’t work so well for me, the stock dropped further after I bought it. One of my reasons for buying was that the stock price worked out to be lower than all of the real estate assets that Loblaw owned. Seemed like a great time to buy. Then, there was nothing but bad news, years of bad news, about how poor their supply management system was, how they kept running out of inventory, how Wal-Mart was really taking it to them. I got my quarterly dividend, but it kept sitting with a negative value in my portfolio for about 5 years. I grew tired of seeing the red and it seemed that there were better opportunities out there — it was doing nothing and looked like it would continue to do nothing. I sold it at a loss and invested into something else, can’t remember exactly what it was but hopefully it was one of my good performers like Genworth (MIC:T) or Davis & Henderson (DH:T) which more than made up for the Loblaw fiasco.

Then of course the inevitable happened: the stock started rising, by quite a bit. I think I sold it at about $30. It is now at $64. Loblaw somehow sorted their inventory and supply chain issues, Wal-Mart was less of a threat, they  bought Shoppers Drug Mart and turned things around. One of my stock theories is to be a buy and hold investor and look to stocks to own for the long term, with the dividends coming in every quarter. Now I wish I had followed my theory.

I still love Superstore and I think by shopping there I have more than made up for my lousy Loblaw trade. Every week they match the sale prices of all the major grocery stores in the area, you don’t even need to bring along the flyer because the shelf price will have already been dropped to match the competitors’ sales prices. This can really add up when you’re saving on a few different items and it means that you don’t have to drive from store to store to get the best price. Plus, sometimes the shelf price doesn’t match the price at the register so if you pay attention and notice, you will get the item for free, up to $10. This is where my husband gets really impatient. He is not a good grocery shopper and when I see this happen and call them on it, he just wants to head to the car and not be around as I deal with it.

 

Michelle

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