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No. of Recommendations: 2
Just a thought. I cover a lot of cyclical business models and we often get into long lasting, naval gazing like debates, that often go nowhere, about how much to adjust this company's earnings and growth vs another. Good reason to not even bother with economically sensitive businesses especially those with a big s/d cycle. It's a lot harder than when Lynch did it - buy when PEs are high, sell when low. Not to undermine the legend.

That said, one would think that with a recession, DG's growth would pick up a good bit therefore the mid-cycle earnings, or at least the growth, is somewhat below trend and understated. This says nothing of the other aspects of the company. There's an assymetry in that we won't give credit to EL's full growth given it's to this hard to understand consumer, so we mark it down, on the expectation of some 'unwind' yet we won't mark up the growth for something else.

You like Canadian stocks, so perhaps consider looking at Dollarama and wrapping your head around it. 25% ebitda margins, makes the same total profit as several other grocers. Very different model mind you.
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