I do not own this stock of Alcanna Inc. (TSX-CLIQ, OTC-LQSIF) which used to be Liquor Stores N. A. Ltd. (TSX-LIQ, OTC-LQSIF). The idea of following this stock came from a reader of my blog.
In May of 2018 the company changed name from Liquor Stores N.A. (TSX-LIQ, OTC LQSIF) to Alcanna Inc. (TSX-CLIQ, OTC LQSIF). The name change was because the company is expanding into cannabis. So far they are not doing well. You can see from the chart below on long term returns. Only the people that bought this stock at the beginning have made money and it was all in dividends.
The Net Insider Buying is rather high at 0.67% of market value. However, the buying is via stock options. It would be a more positive note if insiders were buying stock with cash.
Dividends have mostly gone down. This stock started off as an income trust and therefore had quite high Payout Ratios because income trust can pay out more. It decreased its dividend about 33% when the company became a corporation. In 2018 they changed the dividend payout from monthly to quarterly.
The dividend yield was high in the past because the company started as an income trust. The yield has been travelling south because of dividend cuts. The current dividend yield is moderate at 3.97%.
They decreased their dividends around 67% in 2016 because of the high Payout Ratios. It is expected that the Dividend Payout Ratio would be 176% in 2018. Analysts do not expect the Dividend Payout Ratio for EPS to be below 100% over the next couple of years. They cannot afford their dividends.
The Total Return per year is show below for years of 5 to 13. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.
It would seem that only the people getting this stock at the very beginning have made any sort of total return and that return is all dividends.
|Years||Div. Gth||Tot Ret||Cap Gain||Div.|
The 5 year low, median and high median Price/Earnings per Share Ratios are 18.91, 22.96 and 27.02. The 10 year corresponding ratios are 13.44, 16.22 and 20.71. The corresponding historical ratios are 14.38, 16.42 and 21.21. The current P/E Ratio is 44.41 based on a stock price of $9.06 and 2018 EPS estimate of $0.20. This stock price testing suggests that the stock price is relatively expensive. However, EPS are very low and this would not be a good test.
I get a Graham Price of $6.15. The 10 year low, median and high median Price/Graham Price Ratios are 0.82, 1.04 and 1.26. The current P/GP Ratio is 1.47 based on a stock price of $9.06. This stock price testing suggests that the stock price is relatively expensive. However, EPS are very low and this would not be a good test. EPS are part of the Graham Price formula.
I get a 10 year median Price/Book Value per Share of 1.13. The current P/B Ratio is 1.10 based on Book Value of $286M, Book Value per Share of $8.24. The current ratio is some 2.5% lower than the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The P/B Ratio test is not a good one either because of the fact that book value has declined by 13% and 8% per year over the past 5 and 10 years. On the other hand the P/B Ratio of 1.10 is very low. Any ratio 1.50 or below is low. This does points to a low stock price.
I get an historical median dividend yield of 7.04%. It is high because the company used to be an income trust. The current dividend yield is 3.97% based on dividends $0.36 and a stock price of $9.06. The current dividend is some 44% above the historical median. This stock price testing suggests that the stock price is relatively expensive. This is not a good test because of declining dividends.
An adjusted historical median yield is 3.03%. The current yield is some 31% lower. This stock price testing suggests that the stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 0.52. The current P/S Ratio is 0.50 based on 2018 Revenue of $629M, Revenue per Share of $18.12 and a stock price of $9.06. The current P/S Ratio is some 4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This is probably the best test available.
When I look at analysts’ recommendations I find Strong Buy (2), Buy (5) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus is $11.60. This implies a total return of 31.01% with 28.045 from capital gain and 3.97% from dividends based on a current stock price of $9.06.
Andy Nguyen on Simply Wall Street says that company’s problem is that the operating expenses are growing faster than revenue. Mark Bunting talks to the CEO of this company on Small Cap Power. This company is covered in the first part of the video. Jason Phillips on Motley Fool talks about Aurora Cannabis Inc.’s 25% investment in Alcanna Inc.
Alcanna Inc. formerly Liquor Stores N.A. Ltd is a retailer of adult beverages offering beer, wine and spirits items under the brand names Wine and Beyond, Liquor Depot and Brown Jug. Its web site is here Alcanna Inc .
The last stock I wrote about was about was Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF)... learn more. The next stock I will write about will be Algonquin Power & Utilities Corp (TSX-AQN, NTSE-AQN)... learn more on Monday, June 10, 2018 around 5 pm.
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.
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