TSX:LIQ.DB.B - Post by User
Post by
mercatoson Jan 16, 2016 12:20pm
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Post# 24464968
Similar business story
Similar business storyThe business consolidation of an industry is not new and usually the first company to proceed becomes the market leader. They become the insdustry trend, have the most financial support from lenders, and generally have the most upside in shareholder value.
Case in point. Boyd Group. Started life as a single auto repair garage in Winnipeg. Now has over 300 locations in Canada and US. Very well managed and those who invested with them and purchased income units at $1.01 on Dec 15, 2006 are well rewarded. A littlw more than 9 years later those income units closed yesterday at $62.01
A consolidator is a company that reduces costs on the admin side, leverages pricing on inventory side reducing cogs, as well as providing a proven marketing and roll out plan with a solid HR plan to support expansion and relocation. Thats how Boyd did it and so will LIQ. I am excited to follow LIQ because I have been part of a similar consolidation strategy and have witnessed the benefits.
My view is the long view. This will Zig and Zag for the next 18 months. However once things get rolling on a conistant basis we may never be below $20 again after that time.
If eps can reach $1.00 in 18 months. It would illustrate a strong indication to the accelerated growth potential. I would expext market to reward with a 20x earnings since LIQ peers are at 27. However how much would institutuions value a company with higher than normal growth on sales and net earnings compared to peer group. 30? 35?
We shall see. In the mean time I am a hold and may avg down on the dips (6.50 target)
These are only my thoughts.
DYOD