Alcanna (CLIQ.TO)

He thinks it should be avoided. They cut their dividend. They have a lot of Cap-X ahead of them. He does not like the business model.

Most of their stores are in Alberta. They cut their dividend earlier this year which provided relief for the balance sheet. It freed up capital to improve their stores. Have diversified away from Alberta and only have about two thirds Western Canada. They have stuff in Kentucky, Alaska and BC. New CEO is growth oriented. Dividend yield of 3.41%.

He looked at it and the volume just wasn’t there. It came down last year from $19. 3.75% dividend yield. We are not going to see any resistance until $11, another 10%. If it gets there you may want to take some off the table. It will be impacted by any kind of correction we have.

He still likes this. A very steady business. It has been penalized because they happen to have a lot of their corporate stores located in Alberta, so people have worried about declines in same-store sales. However, the business has been very resilient and very steady. The more interesting thing over the longer-term is whether they are going to be able to successfully execute on the expansion strategy in the US. They have started and have some stores in Kentucky, Connecticut and New Jersey. If successful, that could lead to a much more significant upside to the stock over time. Valuation is reasonable, and it generates quite a bit of free cash flow. Pays a decent dividend.

This is worth what it is worth. Doesn’t look like a trading vehicle, but something that if you really like the name you would have it. Be careful at this point.

The space has been quite beat up because of Alberta exposure. The dividend was cut but it is still 4.5%. It is the largest publicly traded liquor company in North America. They are expanding through acquisition in the US. They have been growing private label, which has higher margin. It is a reasonably stable business in good times and in bad. The stock has been overly penalized.

Very tied to the Alberta economy, so it is under a lot of pressure. Wouldn’t go in at this time. He also has some balance sheet concerns.

He didn’t own this until they cut the dividend. The stock is relatively cheap, and you don’t have to worry about another dividend cut, because the payout ratio is 50%. Management has undertaken a strategic plan to bump up sales and improve margins. Dividend yield of 4.7%.

This is now at speculative levels. They have disappointed investors with missteps and operational issues. He would stay away from companies that have cut their dividend.

Can’t believe they have not cut their dividend yet. At 12%, the market is trying to tell them that it is time to improve their financial flexibility, and at least decrease the dividend. This is really concentrated in Alberta, and when the stores are in areas where people are not there are any longer, revenues are going to start declining. Have always had a bit of a high payout ratio on dividends. They are trying to diverse into the US market, but eventually something has to give. Not a huge fan of this.

He used to cover this company and was very disappointed in the same store sales growth, so he dropped coverage. Since then it has taken a big hit. The competitive situation has changed in the US. There are more states that are selling liquor other than them. Has also changed in Alberta. Also when oil workers are not buying liquor, you have a bit of a business problem. Feels the dividend is very much at risk.

(Market Call Minute.) If the Alberta oil workers don’t drink and the company is losing sales because of that, that says it all.

Has a very large exposure in Alberta and Western Canada. What happened in the energy sector really hit same store sales quite dramatically. Had some problems where they had to appoint 4 VPs to oversee them. They say they will maintain the dividend, but right now they are not earning it or covering it, and have been borrowing to pay it.

They have done a very good job of executing their 7-point plan, which was getting the business back on track for same-store sales growth. Unfortunately for them, oil prices started to collapse. They had a very poor quarter, a lot worse than expectations. At this level, the dividend is probably going to get cut, and if it does, the stock is going to stay down here. On any kind of a bounce in the near term, he would consider exiting. Yield of almost 12%.

He used to own it. At least half of their revenues come from Alberta. Sales are bound to go down there. It always had a very high payout ratio. He does not know if they might have plans to get into Ontario. 9.5% dividend yield.