Opinions
Colin Stewart
Alcanna
CLIQ-T
COMMENT
Aug 29, 2017
Stock price when the opinion was issued
You might be interested:
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)
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. No longer backed by Aurora. Multiple attempts to redesign stores. Multiple products sold at steep discounts. Deteriorating margins. Unlock Premium - Try 5i Free
This is a pretty good steady business. It has a dominant position in Alberta and a very nice business in British Columbia. The recent quarter showed they had some struggles in their smaller US business. The new management and board are doing the right things. They are trying to improve inventory turns, putting money into revamping their very large store base in Alberta. All of those changes should lead to a leaner cost structure, and improve margins in their Canadian store base. Thinks there is potentially a $14-$15 share price over the next couple of years.