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  "docSlug": "207d3ac66ddd",
  "documentTitle": "Canadian Tire Corporation (CTC.A)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-12-05 00:00:00",
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  "notes": "Uses a 'contrast-pairs' framework to juxtapose analyst optimism against activist skepticism.",
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      "kind": "callout",
      "text": "We view the reduction in REIT ownership as a highly negative sign",
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      "text": "Comparison between TD Securities view and Spruce Point view",
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      "kind": "paragraph",
      "text": "We believe CTC has been divesting its stake in CT REIT due to increased pressure on its balance sheet and high debt load. In September 2019 CTC announced another sale of CT REIT shares. While the credit rating agencies are aware of CTC's current leverage issue, equity analysts have overlooked the problem. TD Securities released a note saying the announcement had no impact on its financial performance and rated the transaction as slightly positive. We believe selling shares, at the expense of EPS, is a negative sign and shows that CTC is in need of capital to delever.",
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      "kind": "quote",
      "text": "We believe that this deal illustrates CTC's tremendous financial flexibility, and provides a capital cushion to evaluate additional growth verticals, support its investment-grade status, and potentially return additional capital to shareholders. — Brian Morrison, TD Securities",
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      "kind": "source-note",
      "text": "Source: Equity research reports",
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      "kind": "table",
      "text": "CT REIT Q4 2018 MD&A Risk Section: Significant Ownership by CTC. CTC holds the majority interest in the REIT. In situations where the interests of CTC and the REIT are in conflict, CTC may utilize its ownership interest in, and contractual rights with the REIT...",
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      "kind": "table",
      "text": "Company Press Release (September 10, 2019) Canadian Tire Corporation and CT REIT Announce a Joint Secondary and Treasury Offering of CT REIT Units",
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      "kind": "title",
      "text": "Counterproductive Actions Are A Signal That CTC Must Delever: Selling REIT Stake",
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