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

RE:RE:RE:The Problems: Oil Prices and Alberta

[Goldbuggy1]

FootballFan1 wrote:
According to their latest Presentation dated Sept 2015, 74% of LIQ sales was in Alberta and B.C......Now, this may gradually change with the new USA stores, but the big concern is still how well the Alberta stores do and whether any increase in earnings in the USA may be offset by declining profitability in Alberta (after the associated costs of getting these stores built or, in the case of the NJ stores, paid for and integrated is done).........Also, I'm wondering how price-competitive LIQ is vs. the competition in Alberta...?....Jack Daniels is the same no matter where you buy it from, and though LIQ store locations look great (at least from pictures I've seen), are their competitors offering the same products at lower prices, do people really want wine and beer tasting, private label offerings, fancy stores etc. going forward in this economic environment...?......As for Suncor, they are an integrated O&G company with high-margin refineries and downstream retail (gas station) operations across Canada, plus operations in the U.K, Norway, etc. The Alberta oil plays are only one aspect of the company - Suncor is the largest integrated O&G player in Canada, has a great balance sheet, lots of cash on hand, and actually increased their dividend last year - no comparison to LIQ in my opinion.....

In Size and Capital it is difficult to compare Suncor to LIQ which I agree. I am sure they have more cash also, or at least able to borrow more. Perhaps why we get a 13.1 P/E Ratio on our Stock Price even when paying a 16% Dividend and Suncor has a 442.7 P/E Ratio paying about 3.9% Dividend. But with there Earnings per Share of being only $0.07, I would check again concerning there "Great Balance Sheet" you claim they have. You can dress up a Pig and put Lipstick on him, but he is still a Pig. Suncor's Core Product, which has always been and will continue to be is "Oil Sands" (Tar Sands). In fact they are building another huge one right now called Fort Hills. So it is nice to have 1,500 Petro-Canada Service Stations and (high-margin???) Refineries, but without Oil Sands to supply them then that all means nothing. The cheapest barrel of Oil Suncor can produce in this way is $40 / bbl. The WTI Oil Price right now is $26.55 but Canadian Crude sells cheaper than this as they still need to ship it there. You talk with concern that LIQ might lower the price of Jack Daniels by a buck or two to stay competitive. How would you like to be Suncor and pay $40 for a bottle then sell it for $26.55? Because this is what they are doing right now. But if you still think Suncor is a better buy right now than LIQ, then by all means buy as many as there Suncor Shares as you can.