Thursday, October 8, 2015

Le Chateau Inc.

Sound bite for Twitter and StockTwits is: Cheap and very risky. See my spreadsheet on Le Chateau Inc .

I do not own this stock of Le Chateau Inc. (TSX-CTU.A, OTC-LCUAF). In June 10, 2012 I started spreadsheet because of a request from Blog reader. It was also on my list of dividend and special dividend paying stocks. Jennifer Dowty wrote a column on Dividend Paying stocks in 2010. Jennifer is now a Portfolio Manager for Manulife Asset Management Limited. The title of the article in Investor's Digest was Dividend Stocks: Buy, Hold and Collect. The Investor's Digest is a publication of MPL Communications.

This company started to have problems in 2010. They cut their dividends totally in 2010. It is uncertain whether or not this company will survive let alone restart dividends again.

Revenue hit a peak in 2010 and they have declined since then. Revenue declined further in the second quarter of 2016. (The financial reporting date is on 31 January each year.) They have had earnings losses since 2012. Cash Flows hit a peak in 2009 and it has been declining since then, but Cash Flow is still positive.

Debt ratios are still very good. The Liquidity Ratio is 3.25. The Debt Ratio is 2.03. The Leverage and Debt/Equity Ratios are 1.97 and 0.97.

The company put out a rather depressing news release on their second quarterly report on Market Watch. However, they are trying to turn the company around. A report on Stock House talks about Herschel Segal, the founder of Le Chateau and a Director and majority shareholder of the company providing some long term financing for this company. Kenneth Chan on Van City Buzz asks if this company is on a death watch. He does not see much in the way of hope for this company.

There are two levels of shares. The Class A Shares carry one vote per share and the Class B Shares carry 10 votes per share. The Segal family owns all of the Class B shares.

As far as I can see, there are no analysts currently following this stock.

I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.

Le Chateau is a Canadian specialty retailer and manufacturer of contemporary fashion apparel, accessories, and footwear at value pricing for style-conscious women and men of all ages. The Company has retail locations in Canada and in the Middle East. Le Chateau's web-based marketing is further broadening the Company's customer base among internet shoppers in both Canada and the United States. Its web site is here Le Chateau Inc.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

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