Andrew Peller 2

I am continuing my review this stock (TSX-ADW.A) today. First, I looked at Insider Buying and Selling. There is a bit of both going on, so this does not tell us anything.

When looking at the spreadsheet ratios, I find that the P/E for 2008 was 12, compared to a 5 year average of 15. However, the P/E has recently gone up because of much lower earnings. The earnings for last 12 months were $.27. On my spreadsheet, I was using the 3rd quarter figures, upped ¼ to cover 1 year for comparison purposes. This gives me an earnings figure of $.29. These earnings compare unfavorably with the earnings for 2008 of $.78. Problem is that there was a 3rd quarter earnings loss for this stock.

If you look at the yield for this stock, it is now around 4.7% and this is higher than the 5 year average of 2.6%. There was an increase in dividends by 10% for this year. This is the third year in a row that this stock has raised their dividends. If you look at the Graham Price, this stock, if the earnings are around the $.27 to $.29 is close to the current price. Since the Graham Price is affected by earnings, the Graham Price has come down from the $11 that it was at the end of the last financial year at March 2008.

The good things about the 3rd quarterly report are that revenue has increased and the Accrual Ratio has come down a lot. The bad things that I see are that the cash flow has fallen a lot and the book value has come down a bit. However, I must admit that the current price of $7.00 is quite close to the book value $6.79.

This is a small, little traded company, so I can find few analyst reports. I found none that gives estimates for this company. I have found 3 over the past year and they all think that this stock is a buy. Only one, from the Investment Report, remarks about the fact that they should do something about the cash flow. The three reviews I looked at all see the raise in dividends as a good sign.

Andrew Peller Limited (the “Company”) is a leading producer and marketer of quality wines in Canada. With wineries in British Columbia, Ontario and Nova Scotia, the Company markets wines produced from grapes grown in Ontario’s Niagara Peninsula, British Columbia’s Okanagan and Similkameen Valleys and vineyards around the world. As a result of the acquisition of Cascadia Brands Inc., the Company also markets craft beer under the Granville Island brand. The Company produces and markets consumer-made wine kit products through Winexpert and Vineco International Products. The Company’s products are sold predominantly in Canada. Its web site is www.andrewpeller.com. See my spreadsheet on this company at www.spbrunner.com/stocks/adw.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets.