Opinions Colin Stewart
AlcannaCLIQ.TOPAST TOP PICKMay 29, 2017
Colin StewartStock 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
(A Top Pick April 11/16. Up 34%.) Liquor retailing is a pretty good business. Performance over the last 4-5 years has been substandard, and feels the current management team has mismanaged the business in some ways. Also, there has been an escalation in costs which has led to higher operating expenses as a percentage of sales. There are a lot of things with the business that can be done to improve it.