The Successful Investor Hotline – Friday, May 10, 2013

Article Excerpt

CANADIAN TIRE CORP., $83.78, Toronto symbol CTC.A, jumped 13% this week after the company announced a plan to spin off most of its real estate holdings into a new, publicly traded real estate investment trust (REIT). Under the company’s plan, which is similar to a move by grocery retailer Loblaw Companies Ltd. (Toronto symbol L), Canadian Tire will transfer 250 of its stores, a distribution centre and other properties to the new REIT. In all, these assets total 18 million square feet and are worth $3.5 billion; that’s 72% of Canadian Tire’s 25 million square feet of real estate. After this transaction closes in the fall of 2013, Canadian Tire will sell units of the REIT to the public. It will hang on to an 80% to 90% interest. Meanwhile, the company earned $73.0 million in the three months ended March 31, 2013. That’s up 2.8% from $71.0 million a year earlier. Earnings per share rose 3.4%, to $0.90 from $0.87, on…