Empire Company (A)

EMP.A-T

TSE:EMP.A

31.57
0.09 (0.29%)
Empire Company Limited is a Canadian conglomerate engaged mostly in food retail and corporate investments. The company is headquartered in Stellarton, Nova Scotia. Empire Company also owns the Sobeys supermarket chain.
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Analysis and Opinions about EMP.A-T

Signal
Opinion
Expert
DON'T BUY
DON'T BUY
February 15, 2017

Groceries is a difficult business. They spectacularly botched the acquisition of Safeway Canada in 2013, paying $5.5-$6 billion. Since announcing the acquisition, EPS has dropped from about $1.75 to about $.65-$.70. The debt has been downgraded, and the stock has fallen off a cliff. Just brought in a new CEO. His concern is that the new CEO is unproven in grocery retailing. The company has a lot to wrap its arms around in terms of untangling the mess.

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Groceries is a difficult business. They spectacularly botched the acquisition of Safeway Canada in 2013, paying $5.5-$6 billion. Since announcing the acquisition, EPS has dropped from about $1.75 to about $.65-$.70. The debt has been downgraded, and the stock has fallen off a cliff. Just brought in a new CEO. His concern is that the new CEO is unproven in grocery retailing. The company has a lot to wrap its arms around in terms of untangling the mess.

DON'T BUY
DON'T BUY
February 9, 2017

Most of the chatter on this is the Sobey’s position. It’s an OK business, but when you look at its competitors, both Metro and Loblaw’s, it is sort of a 3rd tier. An extremely cheap stock. The grocery market is a tough one and he would put Holds on all these names. They are really going to rely on food inflation, and he is positive on that side, but the competition is going to be very, very intense.

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Most of the chatter on this is the Sobey’s position. It’s an OK business, but when you look at its competitors, both Metro and Loblaw’s, it is sort of a 3rd tier. An extremely cheap stock. The grocery market is a tough one and he would put Holds on all these names. They are really going to rely on food inflation, and he is positive on that side, but the competition is going to be very, very intense.

DON'T BUY
DON'T BUY
January 11, 2017

He doesn’t like falling knives. This one has been a train wreck. They bought Safeway Canada stores about 2-3 years ago, and bungled it spectacularly. They overpaid and over promised. This was at a time when the grocer consumer was becoming more and more price sensitive. Grocery stores have very high operating leverage. As much is their sales are falling, their earnings are falling off a cliff. A big massive beast and is not going to turn around on a dime.

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He doesn’t like falling knives. This one has been a train wreck. They bought Safeway Canada stores about 2-3 years ago, and bungled it spectacularly. They overpaid and over promised. This was at a time when the grocer consumer was becoming more and more price sensitive. Grocery stores have very high operating leverage. As much is their sales are falling, their earnings are falling off a cliff. A big massive beast and is not going to turn around on a dime.

COMMENT
COMMENT
December 20, 2016

The road ahead is uncertain. This is a disaster to say the least. We don’t know what is going to happen, but thinks that the issues are fixable. They are trying to transform their business into a low-cost provider of food. Sales aren’t that bad, and that will continue until Alberta turns around.

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The road ahead is uncertain. This is a disaster to say the least. We don’t know what is going to happen, but thinks that the issues are fixable. They are trying to transform their business into a low-cost provider of food. Sales aren’t that bad, and that will continue until Alberta turns around.

DON'T BUY
DON'T BUY
December 15, 2016

This company’s big problem is their acquisition of Safeway. They thought they would get the diversification outside of Ontario and the Maritimes, but just don’t understand that the Western supermarket business is a lot different. They dropped the ball and are paying the price for it. Stock was down 17% today. Feels this is more of a tax loss situation right now.

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This company’s big problem is their acquisition of Safeway. They thought they would get the diversification outside of Ontario and the Maritimes, but just don’t understand that the Western supermarket business is a lot different. They dropped the ball and are paying the price for it. Stock was down 17% today. Feels this is more of a tax loss situation right now.

BUY
BUY
December 9, 2016

He doesn’t cover this closely. This is Sobey’s, which is going through some operational concerns. He is pretty confident in management and that they are going to get through that. You want to buy a good quality name when it has kind of fallen on itself. This is a good time to be picking away at this, particularly during the tax loss selling season.

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He doesn’t cover this closely. This is Sobey’s, which is going through some operational concerns. He is pretty confident in management and that they are going to get through that. You want to buy a good quality name when it has kind of fallen on itself. This is a good time to be picking away at this, particularly during the tax loss selling season.

COMMENT
COMMENT
November 10, 2016

(Market Call Minute.) He would like to own these businesses if they maybe yielded 4%-5%, because they are relatively mature. Very low yields, so just not enough to get him interested for his clients.

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(Market Call Minute.) He would like to own these businesses if they maybe yielded 4%-5%, because they are relatively mature. Very low yields, so just not enough to get him interested for his clients.

COMMENT
COMMENT
November 3, 2016

(Market Call Minute.) If you are willing to bet on a turnaround, this has massive opportunity to the upside, if they get it right.

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(Market Call Minute.) If you are willing to bet on a turnaround, this has massive opportunity to the upside, if they get it right.

DON'T BUY
DON'T BUY
October 26, 2016

The space went on a pretty good run over the previous 6 months, so over the last month or so it has really come down a lot. Part of that is competition. Food deflation is a real thing where prices and margins are coming down. He would prefer either Loblaw’s (L-T) or Metro (MRU-T), but these could come down a little.

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The space went on a pretty good run over the previous 6 months, so over the last month or so it has really come down a lot. Part of that is competition. Food deflation is a real thing where prices and margins are coming down. He would prefer either Loblaw’s (L-T) or Metro (MRU-T), but these could come down a little.

SELL
SELL
October 12, 2016

(Market Call Minute) It is a value trap. Management is not delivering.

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(Market Call Minute) It is a value trap. Management is not delivering.

DON'T BUY
DON'T BUY
September 15, 2016

He is bearish on the grocery space in Canada, but he thinks most of the damage has already been done to this one. It is more reasonably valued than its peers.

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Empire Company (A) (EMP.A-T)
September 15, 2016

He is bearish on the grocery space in Canada, but he thinks most of the damage has already been done to this one. It is more reasonably valued than its peers.

HOLD
HOLD
September 6, 2016

(Market Call Minute.) Being punished because of the Safeway acquisition.

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(Market Call Minute.) Being punished because of the Safeway acquisition.

Alex Ruus

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Price
$21.650
Owned
Unknown
WEAK BUY
WEAK BUY
August 29, 2016

It has had its struggles with the Safeway acquisition. His model price is $25.50, a 20% upside. It should hold here at EBV+2. All his Canadian picks he is not crazy about.

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It has had its struggles with the Safeway acquisition. His model price is $25.50, a 20% upside. It should hold here at EBV+2. All his Canadian picks he is not crazy about.

SELL
SELL
August 23, 2016

This is going to have the issues of taking over Safeway, which hasn’t been going smoothly. The exit of the CEO is indicative of that. These things just don’t happen in 6 months or a year, and all of a sudden get turned around. It could take a long time to settle out.

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This is going to have the issues of taking over Safeway, which hasn’t been going smoothly. The exit of the CEO is indicative of that. These things just don’t happen in 6 months or a year, and all of a sudden get turned around. It could take a long time to settle out.

DON'T BUY
DON'T BUY
August 12, 2016

Made a major acquisition on the retail grocery side in Western Canada, that turned out to be a disaster. The CEO is now gone, and they have a replacement. This is a tough business to be in. It is going to take them a little while to sort out. Once you lose clients in the retail grocery business, it is hard to get them back.

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Made a major acquisition on the retail grocery side in Western Canada, that turned out to be a disaster. The CEO is now gone, and they have a replacement. This is a tough business to be in. It is going to take them a little while to sort out. Once you lose clients in the retail grocery business, it is hard to get them back.

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