Diamond Estates Wines and Spirits Inc. (DWS.V)

Fairly well run. Tough area. Thin margins, lots of taxes. Interprovincial trade isn't easy. Decent dividend, never trades too expensively. Growth isn't there. Headwind of people just not drinking as much.

Canadian wine has big tailwinds, including Premier Ford's cash rebate that began last year which is putting cash into Ontario wineries. Also, retail outlets in Ontario are opening up. Volumes are surging. The Buy Canadian movement has a lesser impact. Removing interprovincial barriers will help. Many tailwinds now and this will raise DWS profits. One day, DWS will be privatized.

Sector's had a rough ride, with the pandemic plus higher input costs. Wine consumption has flattened. Last results showed significant margin improvement. Growth is challenged, making small tuck-in acquisitions. Expects majority shareholder to eventually take it private.

DWS is a small company that produces and distributes wine; the company’s market cap is only $14M and it is extremely illiquid. Revenue in the last five years has been quite volatile, but overall revenue on a trailing twelve-month basis is basically flat compared to five years ago. DWS is unprofitable and burning cash. Overall, we see it as a high-risk name with low liquidity, uncertain growth and profitability prospects. We think investors are better off deploying capital somewhere else.
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Been a long, rocky road. Still owns it, unfortunately. The owners are committed to making this a success. The balance sheet is good now, and they're making small acquisitions. Hold or buy it now. He expects the company to go private of be sold. Good margins, but the wine industry has been hit hard in recent years (Covid, rising costs).

Wine industry hit extremely hard in Canada -- BC wildfires, lower demand during pandemic, rising costs, less demand for alcohol in general. Good news that Ontario providing tax breaks and adding retail locations. Better days ahead. Still expects majority shareholder to do a buyout, so hold onto shares, as he's hoping for several multiples of what it's trading at now.

He remains a big shareholder. The pandemic hurt a lot of alcohol companies by cutting off their sales channels, and supply chain problems push costs through the roof.  They now have a big shareholder, a major player in North American juices, and he expects them to buy out DWS. DWS has divested some assets like real estate. They're putting the pieces in place for this sale, he suspects. Chances of shares rising are quite good.

Lingering issues from pandemic should improve. Expects largest shareholding family to buy out minority shareholders at some point. Should see nice jump in sales and profitability over next 12 months.

Challenges from supply chains, higher costs, and the pandemic. These things are normalizing now. Turning around slowly. Possible acquisition target. Very valuable assets.

There are only two publicly traded wine companies, this one and Peller. The pandemic hurt both but they are doing a little better now. His company owns just under10% and Lassonde owns 30%. It needs a better bottom line but there is good upside on a take-over of the rest of the company at a much better price.

It was hit hard during the pandemic when restaurants were closed, but are recovering strongly. Recently, have faced higher freight and material costs. Despite those, margins are healthy. Consumers are returning to bars, restaurants and airports. He expects better results in coming quarters. Lassonde owns over 30% of DWS and he expects them to buy out the company once DWS improves its margins in say 12-18 months.