It’s getting harder to envision hanging onto shares of a company for more than a few quarters at a time, let alone an entire decade, especially given that the bearish, fear-inducing chatter tends to accelerate when the broad markets are at risk of slipping into a correction and a new list of fears makes it more tempting to sell, even if it means turning a paper loss into a real one.
Undoubtedly, for investors who are willing to tune out and hang on, I think there are rewards to be had, especially for those who can tell the difference between noise and actual developments that might challenge or even completely destroy their original investment thesis. Indeed, whether it’s the rise of a new technology that could eat away at margins or mismanagement, several factors might justify hitting the sell button.
Of course, investors should stay in the know when it comes to their really long-term positions, especially at a time like this, when AI is probably hungry to take market share across various industries as a monetization “rush” of sorts swoops in to justify recent spending. It’s hard to know what’s at risk, what can adapt, and what can thrive amid agentic AI.
But the good news is you don’t have to bet on the fallen companies that might experience vast shifts in their strategies. In this piece, we’ll look at one stock that I think has economic moats that are wide and immune to the eroding effects of new tech, including AI agents.
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Dollarama
Dollarama (TSX:DOL) and its network of discount stores probably isn’t going to be disrupted at the hands of an AI agent. Of course, agentic commerce might change the way how consumers shop, but, for the most part, I think one needs to physically go into a store to get the absolute best deal. And when it comes to affordable goods, Dollarama continues to be the top dog to beat. Given its supply deals and ability to pass savings to consumers, I view the firm as just too competitive on pricing to shed its moat.
Of course, management changes and a failure to adopt AI behind the scenes might limit how much value the retailer can pass on to consumers. Either way, though, I think Dollarama has the means to drive operating costs lower and perhaps offer even better deals to consumers in a time when inflation is lingering.
Dollarama stock is fresh off a correction, which I previously touted as a great entry point for investors. The traffic decline seems mostly due to external factors rather than anything specific to the firm itself. Until the firm reveals multiple quarters of flat-to-negative traffic, I wouldn’t get concerned enough to hit sell.
The company is currently sprinting down a promising and lengthy multi-year growth pathway. It’s expanding its footprint, adding warehouse capacity, and is acquiring its way into new markets, which might be the golden pathway to next-level growth. Between domestic stores, Dollarcity, and Australian retail locations, I think the discount retail icon has runway and a capable enough management team to execute.
In short, I like the growth formula and think the next 10 years could be incredibly exciting, regardless of what direction the economy takes.
