Friday, November 2, 2012

Andrew Peller Ltd 2

On my other blog I am today writing about the Money Show in Toronto for 2012. I have been putting my notes up as I transcribe them. I am doing my final post today. I will then go back to posting twice a week, on Mondays and Wednesdays. If Monday is a holiday, I will post on Tuesdays and Thursdays...continue...

I do not own this stock of Andrew Peller Ltd. (TSX-ADW.A, OTC-ADWPF). I started to follow it because I read a positive review on this stock, which suggested that it was a good buy. I also 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 mostly was in dividend income).

The stock has Class A non-voting shares and Class B voting shares. Both shares are on the TSX (ADW.A, ADW.B), but insider own more than 75% of the Class B shares. There is far more Class A shares so trading volumes are much better on these shares. Over the past year there has been a minimal amount of insider buying and insider selling according to the insider trading report.

Insiders own a lot of shares. For example the CEO has shares worth $12M, a director owns shares worth $37M and there is a 10% holder who owns shares worth $19M. These are the biggest holders of shares. According to Reuters, there are 3 institutions who own shares, but less than 1% of the outstanding shares. Their holdings have gone up by 3.8% over the past 3 months.

The 5 year low, median and high median Price/Earnings Ratios are 10.46, 11.64 and 13.32. The current P/E Ratio is 10.01. This ratio indicates that the price is relatively low.

I get a Graham Number of $12.94. The 10 year low, median and high median Price/Graham Price Ratios are 0.69, 0.83 and 0.98. The current P/GP Ratio is 0.74. This ratio shows that the current stock price is reasonable.

I get a 10 year Price/Book Value per share Ratio of 1.27 and the current P/B Ratio is 1.21. The current ratio is 95% of the 10 year P/B ratio and this ratio shows that the stock price is reasonable.

The current dividend yield is 3.43% and the 5 year median dividend yield is 3.58%. What you want is the current dividend yield higher than the 5 year median to suggest a good stock price. In this case the current dividend yield is 4% lower than the 5 year median. (I notice that the 10 year median dividend yield is 3.28% and this is some 4% lower than the current dividend yield.) All this would suggest that the stock price could be considered to be a bit high. However, it is not that high, relatively speaking.

There are no analysts following this stock. I note that Advice for Investors.Advice Hotline email of June 2012 talks about the merits of owning Andrew Peller and says that this stock remains a buy for long-term gains and attractive dividends that occasionally rise.

Stock is a consumer discretionary stock and is probably of median risk. Insiders have a large stake in this stock and it is currently selling at a relatively reasonable price.

Andrew Peller Limited 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 Andrew 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 or StockTwits.


  1. Although your blog is related to education purpose but this is really one of the best investment advice. Great, thanks.

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  2. As the only publically traded wine stock in Canada, I wonder if the share price will benefit from the ongoing wildfires in Napa Valley, California.