Opinions Peter Hodson
AlcannaCLIQ.TOCOMMENTAug 13, 2013
Stock price when the opinion was issued
As of Apr 01, 2022. Market Open.
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It was an income trust, and so they distrbitued too much money and didn't keep enough cash to refurbish their stores and stay competitive. That hurt, then they the oil price fell (they're based in Alberta), then they made some dumb acquisitions. Aurora Cannabis and the Bitove family have since invested. They've cut prices to wipe out competition, then bought that competition--twice. This has worked. Eventually, they will raise prices now that they've wiped out those competitors. Alberta law limits other liquor stores within a certain radius from existing shops, so they have a moat. And they're getting into cannabis. This stock is starting to move. (Analysts’ price target is $8.05)
Fabrice Taylor
Ryan Modesto
He still likes it. They are a leading liquor retailer and will get into Cannabis. They will be getting into Ontario as well as where they are in Alberta. They generate free cash flow and earnings already. It is a stealth way to play the cannabis sector.
Colin StewartDominant position in Alberta liquor, which is competitive, so they're diversifying. Trying to acquire licenses in cannabis, which is an interesting opportunity. Liquor business in turnaround mode which will improve over next few years, but market isn't giving value to the cannabis division. Will have a strong position when the licenses come through.
Colin Stewart
This is one you just buy for income, not growth. On a cash flow basis, the dividend is quite secure. The main problem is that there is a bit of a competitive shift in the US. Some of the states that they are operating in, the states around them have changed their liquor laws be a little bit more flexible. Same-store sales dropped 3% in the last quarter, which was kind of worrisome to the market. Sales did increase so it’s not a total disaster.