I do not own this stock of Alcanna Inc (TSX-CLIQ, OTC-LQSIF). The idea of following this stock came from a reader of my blog.
When I was updating my spreadsheet, I noticed analysts think that this company will have earnings losses over the next 2 years. However, the second quarterly report shows good earnings. Analysts think that the company will have a loss in 2021 of $0.31, but the EPS to the end of the second quarter is $2.29. However, in the second quarter, the company had an operating loss and only had a profit because of the sale of discontinued business. They also paid off their debts. Analysts are right to suggest that this company will not be making any money from their business this year.
Also, there was only good earnings in 2020 because they sold discontinued business. There was an operating profit, but they used that and the sale of businesses to pay off some of their debt and provide earnings. They sell booze and cannot make money?
This company has a missed record with dividends. They suspended dividends in 2019. They are having a hard time making a profit. Over the past 15 years they have given dividend increases 4 times and have cut dividends 5 times.
Debt Ratios need improving. The Long Term Debt/Market Cap Ratio is good at 0.32. The Liquidity Ratio is 3.19 and that is good. The Debt Ratio is quite low at just 1.36. I prefer this to be at 1.50 or higher. Until the last two years, the Debt Ratio was good. The Leverage and Debt/Equity Ratios are too high at 3.76 and 2.76. I prefer them to be at 3.00 and 2.00 or lower.
The Total Return per year is shown below for years of 5 to 16 to the end of 2020. 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 chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2015 | 5 | 0.00% | -3.53% | -6.69% | 3.16% |
| 2010 | 10 | 0.00% | -2.73% | -8.99% | 6.25% |
| 2005 | 15 | 0.00% | 1.65% | -6.97% | 8.62% |
| 2004 | 16 | 0.00% | 4.48% | -5.46% | 9.94% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are negative and unusable. The corresponding 10 year ratios are 6.44, 7.87 and 9.29. The corresponding historical ratios are 12.45, 16.03 and 17.96. The current P/E Ratio is negative as they are not expected to make a profit this year, nor next year. This company has earning loss 4 of the past 10 years. No testing can be done here.
I estimate a Graham Price of $ 14.74. The 10 year low, median, and high median Price/Graham Price Ratios are 0.76, 1.04 and 1.20. The current P/GP Ratio is 0.56 based on a stock price of $8.28. The current ratio is below the low of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap. It is uncertain how good this test is.
I get a 10 year median Price/Book Value per Share Ratio of 1.25. The current P/B Ratio is 1.96 based on a stock price of 8.28, Book Value of $169, and Book Value per Share of $4.22. The current ratio is 57% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median Price/Cash Flow per Share Ratio of 9.34. The current P/CF Ratio is 17.93 based on Cash Flow for the past 12 months of $18.5M, Cash Flow per Share of $0.46 and a stock price of $8.28. The current ratio is 92% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I cannot do any dividend yield testing as dividends are suspended.
The 10 year median Price/Sales (Revenue) Ratio is 0.48. The current P/S Ratio is 0.44 based on Revenue estimate for 2021 of $756M, Revenue per Share of $18.88 and a stock price of $8.28. The current ratio is 7.7% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is possibly reasonable. The P/S Ratio test points to that. However, the P/B Ratio says the stock is expensive. This is because it has not been making any money recently. This are the only tests that a good.
Is it a good company at a reasonable price? This is not a company I would personally be interested in. Shareholders have not made much in this stock. They started to have earnings losses 5 years ago in 2015 and are expected to have earning losses this year and next.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (1) and Hold (1). The consensus would be a Buy (which most of consensus are at). The 12 month stock price consensus is $10.42. This implies a total return of 25.85% based on a current price of $8.28, all from capital gains.
This year an analyst on Stock Chase say the company is a hold. In 2019 they were still saying it is a buy but risky. Christopher Liew on Motley Fool says this company is a screaming buy for a long growth runway. The Executive Summary on Simply Wall Street gives this stock 3 stars out of 5 and list no risks. A writer on Simply Wall Street says the companies intrinsic value is $9.10 but its prospects is negative growth. The company reports second quarterly results on Global Newswire.
Alcanna Inc is a private sector retailer of alcohol in North America and the largest in Canada by number of stores, operating in Alberta and British Columbia under the Wine and Beyond, Ace Liquor Discounters and Liquor Depot banners. The Company's majority-owned subsidiary, Nova Cannabis Inc. cannabis retail stores in Alberta, Ontario, and Saskatchewan. Its web site is here Alcanna Inc.
The last stock I wrote about was about was Great-West Lifeco Inc (TSX-GWO, OTC-GWLIF) ... learn more. The next stock I will write about will be Granite REIT (TSX-GRT.UN, NYSE-GRP.U) ... learn more on Monday, September 20, 2021 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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