Post by
rustyblades on Feb 23, 2022 2:17pm
A COVID re-opening play
I finished building my position at $7.30 yesterday. This company is a well managed company that increases its dividends on an annual basis. They have survived the past two years of COVID lockdowns and with the re-opening are set for a return to steady growth in earnings.
During this period their sales in restaurants and banquet centers suffered. Peller provides a reasonable quality wine at a reasonable price to this market. True it's not for the $100 per bottle crowd but it is a good choice for people who work hard for their money. In addition the tourist trade to their vineyards was limited. The Shaw Festival was shutdown for two years and their vineyard restaurants were either locked down or at reduced capacity.
The situation for this coming spring and summer is totally different. All venues are able to operate at capacity. The Shaw Festival is back.
Their recent purchase of the Riverbend Inn was a master stroke as it affords Peller synergies that are not available to any other entity that could have purchased the inn. Combined with the adjacent vineyard facility and restaurant it provides a well rounded destination for day trippers, theatre goers and weddings.
Some patience is required. The results for Jan - Mar 22 will still suffer from the lockdown in January and only partial re-opening for most of the period. Apr - June 22 however will see the full benefit of full capacity at all facilties and pent up demand for day trips and weddings.
So another six months for the August report of the quarterly results showing the turnaround but the share price will move up in advance of that date.
Low risk at hese levels and collect the 3.4% dividend yield while wairing for the inevitable resurgence..
Comment by
Tapcet on Feb 25, 2022 1:59pm
At this price level, have to agree. Assume the shorts are covering now. I bought today, hoping the very low multiple and post-covid surge outweigh the deficiences in management. Peller still needs a pay cut.