Thursday, August 19, 2010

Andrew Peller Ltd

I owned this stock (TSX-ADW.A) at one time. I held it from October 1996 to August 2000. I sold it because the company was having some difficulties and I did not think there would be a dividend increase anytime soon. I made a return of 5.4% (of which most was in dividend income). In any event, the dividends were flat between 1998 and 2006. They just started to increase their dividends again in 2007. However, dividends have again been flat since March 2009.

Looking dividend growth, the last 5 years has been the best it has ever had with a growth of almost 9% per year. All this growth took place in March 2007 and March 2009. The annual statements are dated in March of each year. Total return over the last 10 years is quite good at almost 12%. However, total return over the last 5 years is at 1.3% per year. This is because the stock price is basically back to where it was in 2004. Dividends account for between 3 and 4% of total returns.

Growth in revenue goes from ok over the past 10 years to good over the past 5 years. There is a problem with cash flow in that when you look at cash flow excluding non cash items, you have a 5 year growth of just 2% a year. Growth in book value is also not something to write home about as it is just over 5 % per year over the past 5 and 10 years.

The Liquidity Ratio is better for the 1st quarter of 2011 at 1.42 and up from a 5 year average of 1.32. The Asset/Liability has improved from that of last year, as it is now 1.76 rather than 1.49 of last year. I like to see this ratio at 1.50 at minimum. The 5 year average of 1.65 is fine.

I started to follow this stock as a newsletter I like has recommended this stock a number of times. I have no interest in buying it presently, but I will continue to follow it.

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. They also market 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. Class A shares are non-voting. Its web site is here Peller. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.

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