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Gavin GrahamAndrew PellerADW.A.TOHOLDOct 19, 2016

This is the biggest Canadian wine company. Wine is a wonderful long term play on rising consumer income, and this is a wonderful company.

Gavin Graham

Unknown

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$12.45

Stock price when the opinion was issued

$5.52

As of Jun 08, 2026. Market Open.

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DON'T BUY

Fairly well run. Tough area. Thin margins, lots of taxes. Interprovincial trade isn't easy. Decent dividend, never trades too expensively. Growth isn't there. Headwind of people just not drinking as much.

DON'T BUY

Stores may or may not be impacted by Ontario government rolling out more retail locations. The Pellers stepped down from the board, possibly planning a bid to privatize the company but he's not really sure.

COMMENT

The price has dropped substantially because of slowed growth and problems like supply chain issues. However there should be more retail distribution opportunities for the wine industry. Also there may be financial programs that will help as well. Margins should improve and he feels there are better days ahead.
Editor's Note: The caller was also asking about Market Call having someone on to cover micro-caps.

HOLD

Very challenging through pandemic. Hit by higher input costs. Took on debt to make acquisitions prior to pandemic. Valuation is massively compressed. Assuming this is the bottom, better days ahead.

BUY

It was hit hard during the pandemic when restaurants were closed, but are recovering strongly. Recently, have faced higher freight and material costs. Despite those, margins are healthy. Consumers are returning to bars, restaurants and airports. He expects better results in coming quarters.

HOLD

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. New e-commerce platform could help sales. Slower growth than expected. Debt remains high. Trades at discount to peers.

Unspecified

It has been a tough market for small cap companies. Has had higher input costs and challenges with the restaurant and hospitality industry being shut down for part of the pandemic. A well managed and quality company that trades cheaply. It will take a while for margins to improve so could sell for a tax loss and buy back later.

BUY ON WEAKNESS

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Expanding product offering to other spirits. E-commerce helped increase sales. Regulatory and taxation risks. Valuation reflects slower earnings growth.

BUY

Very well managed, high quality company. #2 company in Canadian wine market. Recent market selloff has created buying opportunity for investors. Expecting post Covid-19 alcohol sales to rebound quickly. High margins will allow for profitability going forward.

PAST TOP PICK

(A Top Pick Apr 28/21, Down 32%) Beverages had a good run during Covid as consumers stocked up. Peller saw good growth, even though some areas of Canada were shut down. But import costs have risen, so margins have declined in the last few quarters. The good news is that travel and restaurants are reopening--and these offer Peller higher gross margins, which he expects to gradually improve this year into next. Trades at a cheap valuation now, so it's a good time for a long-term investor to enter. Brighter days are ahead.

PAST TOP PICK

(A Top Pick Mar 22/21, Down 34%) Company had tough time during pandemic. Margins not as strong as expected (rising packaging/shipping costs). Expecting strong rebound in sales as pandemic ends. Launching new products (spirits etc.). ~12 P/E stock price presents buying opportunities. Well managed company with strong free cash flow.

STRONG BUY

A very high quality company that is generating high margins and great cash flow. They have owned it a long time. Recent results showed margins were recovering. They have upgraded the quality of their wines allowing them to reach higher price points. Their estate winery business is booming and they are generating record retail sales. This should continue. It is really cheap here and the company is buying back large volumes. This is a great area to buy as there is very little downside here.

BUY

One of best managed companies in Canada. Great margins, great business. Grow organically and by acquisition, especially high-end brands. Cheap. Share buybacks. Hit by pandemic, but should see a surge in sales over the next few quarters. Good time to buy a high quality stock.

STRONG BUY

This is a real quality company, really well managed, great cash flow. This is a great time to buy it. It has not been this cheap in eight to ten years. The retail channels have done well although restaurant sales have not. It is recovering with restaurants reopening.

PARTIAL SELL

The stock has seen some significant down moves in recent weeks. Starting to show up with buy recommendations based on value. The company is well positioned as the second largest wine producer in Canada. Dealing with some headwinds. Strengthening CAD will create more imports which can be difficult for domestic producers. A short term speculative positioning rather than a long position. Will see volatility, especially in summer with thinner liquidity.

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Stockchase, in its reporting on what has been discussed by individuals on business television programs (in particular Business News Network), neither recommends nor promotes any investment strategies.

We paraphrase the experts by hand, we watch the shows and write down what we understood from the experts’ comments. We are human and can make mistakes, help us fix any errors. If you see something that you know is not right or if there is a problem with the site, feel free to email us at : [email protected].

Gavin GrahamAndrew PellerADW.A.TOHOLDOct 19, 2016

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