Corby Spirit and Wine (A) (CSW.A.TO)

It is not a super liquid stock. This summer has been a case where there is one seller and they go down.

This is a cash machine with high margins. Had looked at it a few times when they were starting to venture into the US, which tended to scare him a little. It gives you a special dividend once every few years. A pretty safe company.

He likes the stocks where people don't pay attention to and Corby falls into this group. Market cap of 6 million. Trades at a slight discount to peers. No take out premiums. Low growth. Yield is 3.6%, Not very interested.

(A Top Pick July 22/14. Up 11.64%.) Thinks the push into the US with Wisers is going relatively well and it is going to take another 12-18 months to really evaluate it. This is a stable, core Canadian business. Has a nice dividend yield while you wait. If they are successful with Wisers, it could significantly add, even double their earnings. Yield of 3.5%.

This is a great hold. Why wouldn’t a sensible portfolio hold the stock? It pays a dividend and it is safe.

(A Top Pick April 22/14. Up 23.06%.) Has owned this for a few years and can see continuing owning it for several more years. Well-run business. Undergoing a major push to try to market their Wiser’s whiskey into the US. They have a strong position in the Canadian market and are working to expand that. Pays a nice 3%-3.5% dividend.

He has held it for 4 or 5 years. About 18 months ago they switched the marking for Wiesers to their parent company. They are gradually rolling this out in the US and are doing well. He could see this being taken out.

Really likes this company. Wines and to a large extent spirits. Very stable with good brands in Canada. There is a sort of Renaissance going on in the whiskey business, and they are starting to sell and distribute their JP Wiser’s into the US market. The company is 51% owned by Pernod Ricard. At some point they might try to buy the other 49%. Nice dividend yield.

Spirits and wines. Whiskey is the new ‘hot’ thing in the category. It has been shooting higher because they were highlighted at a conference a few weeks ago. It is not normally followed that well. They reported decent earnings yesterday, increased the dividend and issued a special dividend. They are expanding into the US with their Wiser’s brand. Trades at a discount to more global brands (11 times earnings). Nice dividend.

Always favourable toward the ‘sin’ stocks. A good company, a defensive stock. It grows and the dividend is safe.

There has been a real trend in this business. There are 3 or so large companies that seem to be gobbling up everything. This one has stayed independent for many years. Thinks the spirit and wine business is one that is demographically doing better than the beer business right now. Feels the 3.5% dividend is safe.

The really interesting element is that whiskey is the big hot trend in the spirits business, and Pernod, their parent, does not have a US whiskey brand. Corby partnered with J P Wisers, their Canadian Rye brand, in order to make a big push into the US. They are just in the early stages. If successful and gets traction, this company’s earnings could go up substantially. If this expansion is successful, you are either going to get a big dividend increase, or Pernod is going to come along and try to buy the remaining piece of this company. Yield of 3.51%.

He prefers to follow the most widely held of the .A and .B stocks. It should have support about where it is and if it breaks it it will continue down.

The big story here is still the Wiser’s rollout in the US. They are in something like 12 states now, and their parent Pernod, is pushing it through their US distribution system. They should see a nice revenue and earnings ramp over the next year or so, and then you should see the cash flow.

Trading at a discount of 11X EBITDA versus 18X EBITDA of other companies. 3.5% dividend yield, so you get paid to wait. Undergoing a fairly major expansion in the US with their J P Wiser brand, one of the leading brands of rye whiskey in Canada. This is a really hot trend today in the spirits market. If successful with the expansion in the US, there could be a significant earnings upside. The wildcard is Pernod Ricard, the 4^th or 5^th largest liquor company in the world that owns 50% of this company. They might make a bid for the rest of Corbys. Yield of 3.44%.