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Waterloo Brewing Ltd.
WBR-T
BUY ON WEAKNESS
Jun 01, 2021
Allan Tong’s Discover Picks WBR stock is a small-cap, so beware of volatility, trading only 22,000 shares per day. It pays a 1.49% dividend, far smaller than a few years ago. The big reason is that share prices have soared. In the past 12 months, WBR has run from $2.98 the way to $7.99 as of Monday’s close. It trades at 95x earnings, but remember that the industry average is 272x. The gross margin is slightly below its peers of 25.7%, but Waterloo’s profit margin is 3.46% vs. the industry’s -1.07%. Waterloo boasts the highest ROE in the industry at 8.88% compared to 3.23%. Read 3 Hot Canadian Summer Stocks for our full analysis.
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breweries
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COMMENT
Looking at the craft brewing market, it's very niche and we've seen big companies acquire smaller craft breweries. He expects the same thing happening for cannabis infused drinks. There's a strong seasonality to the stock, but it has stayed strong. Cannabis infused beverages could have big upsides for them.
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PAST TOP PICK
(A Top Pick Nov 19/18, Down 6%) A craft brewing company that also receives outsourcing from bigger brewing companies. A house of brands type company. Strong management team that has grown revenue successfully. A small cap stock that isn’t well followed by investors. A potential takeover candidate.
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BUY
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Sales were 3% less than expected. EPS was better, at 4.8cents. Revenues grew 15% thanks to pandemic restrictions being eased. EBITDA rose 67%. A good recovery quarter. Ok buying this for small cap allocation. Unlock Premium - Try 5i Free
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