LIQUOR STORES NA LTD 4.70 PCT DEBS T.LIQ.DB.B

RE:a possible explanation

[Goldbuggy1]

microcaphobby wrote:
I suspect there has been a lot of mutual fund redemptions and so the fund managers have to sell something. LIQ is closely tied to Alberta so as oil goes down so does the perception that liq is suffering. I have been buying at this level.     

I think we can all agree that oil prices has an effect on LIQ Stock Price, but it is not agree upon as to how much it should have. Suncor is perhaps Canada's Largest Independent Oil Company. Much of there oil play is in Tar Sands (expensive oil) although Suncor has improved in this area and produces oil at about $40 / bbl. So at $30 / bbl. they are losing money as reflected in there EPS. But before the oil crash Suncor was trading around $45 / share. It now trades at around $30 / share, so a 50% loss. Its P/E Ratio is in the 450's and its present Dividend is 4%, which could also be on the auction block. LIQ on the other hand was trading at around $14 / share before the oil crash and now trades at around $7 / share. A loss of 100% and double that of Suncor. Unlike Suncor LIQ is also making a profit. A 1% drop in Same Store Canadian Sales only indicates that sales are not as strong as last year. They still made a nice profit last quarter. They also continue to pay a Dividend at 16% and 4 times what Suncor pays, which in my opinion is at least equally at risk. So logically we could expect a price drop in LIQ due to lower oil prices. but not a slaughter like this. This stock is way oversold.