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

I'm out at $7.90

[Goldbuggy1]

As much as I wanted to find value in this company and hope to recoup some of my losses I just don't see how. I see a $6 Share price more likely than $9. The company just paid 60% of sales for that deal in New Jersey, but that is a stable and growing market. What would Albert be worth right now? Maybe 50% of sales? So at $750 M is sales 50% of that is $375 M. But the company also owes $195 M so you have to take that away first. So now you are left with $180 M. With 27.5 M Shares that is $6.54 Share. Many companies are paying 6.5% Dividends with less risk. For this company to be the same the share price would have to be $5.50. Growth with this company will be slow now until Alberta picks up. They have only actually added 6 stores since 2013 with 249 Stores then, and 255 Stores now. Royal Bank pays the same Dividend % as LIQ does now, has slow growth because of its size, but also far more secure. There P/E is 11. If you apply the same P/E Ratio to LIQ and (adjusted) Net Earning of $0.57 you end up with a share price of $6.27. Remember that high P/E Ratios are given to companies who show high growth potential. Opening 6 stores in 3 years is not high growth. Having your shares cut into half and you net earning falling from $1.08 per share in 2011 to $0.57 per share, is not high growth. Especially when you have increased your debt and also shares from a share sale, and to the tune of about $80 M. Buying into the USA Market now to diversify, is not proactive. It is reactive! They are also buying (borrowing) on a high USD. So there debt on this is also set in USD Converted to this high rate to Canadian Dollars. So what would happen when the Canadian Dollar finally gains some ground on the USD? The debt remains the same as it was borrowed in CAD but the sales and profits would drop because they would be getting less for the USD. Taken a closer look, how did they calculate having an extra $18 M form the Dividend Cut? By using $1.08/ share and then subtracting the new Dividend of $0.36 / share leaving them an extra $0.72 / share? So $0.72 x 27.5 M shares gives you $19.8 M less taxes? The trouble with this calculation is that they never made a $1.08 / share to pay the Dividend. They made $0.57 / share and even then this is adjusted. o in cash they only are saving $0.57 - $0.36 = $0.21. Take that $0.21 and x 27.5 M and you have $5.8 M. That doesn't even cover the loan interest payments, so maybe another dividend cut is on the way soon. But the way this management talks out of the side of there mouth I suppose they could say they are saving $18 M from the Dividend Cut as now they don't have to borrow $12.2 M to pay this Dividend anymore. I often wondered why the last CEO Rick Crook quit shortly after they appointed a new chairman to the board about 16 months earlier. In my view he was doing a good job and he started the expansion into the USA in both Alaska and Kentucky buying several stores in both place. I am out now as I can't stand the mismanagement of this company anymore and how volatile this stock has been. I do wish I never bought back in at $9, but it is what it is. I also don't see much growth potential here either. Even if Oil Prices recovered tomorrow it will take years for the Alberta Economy to. The only way they can expand now is if they borrow more money which so far has not paid off for them. But then when you got a CEO with the whole world falling down around him, and all he can think of is hiring more executives and where he is going to borrow the money to paint more shops in Alberta, what can you expect. I wish you all good luck.