Andrew Peller Ltd T.ADW.A

Reopening play?

[Yohhhh]

I got into Andrew peller thinking they would be well positioned when things reopen and they looked like a reasonably valued company. Unfortunately, this one is tanking. The last few quarters have been quite disappointing. I don't know enough about management but they seem complacent regarding the poor financial performance. That being said, the next quarter should be better based off the seasonality and Covid reopening. Last year, I had the same expectation during the q2 and q3 but management blamed poor performance on the previous year being an anomaly... This year if they have poor performance they'll blame it on inflation. I should've cut my losses but here I am haha

[Stonksonlyup90]

SG&A is very bloated.. there has to be some levers to pull to bring that in line with expectations. I think Institutional investors are waiting until there is a better line of sight into how the company plans to control/cut costs.. excuses only go so far (COVID, supply chains, inflation) - it's time for management  to take matters into their own hands 

[johnathamilton]

Yes. Second generation is running the operation and given that family sit on the board of directors, and the multiple vote share structure, there is no real accountability. They brought in an external President, but he must have stepped on some toes and was quickly ushered out of the organization. It's all been downhill since then.

[johnathamilton]

If anyone is interested, we could go as a group to the next Annual meeting and ask some pointed questions during the Q&A portion of the meeting. I'm sure we're not the only unhappy shareholders. 

[CanuckDad]

Is there a large institutional investor that owns a good chunk of Class A shares?  With no news now until next quarter results, I don't know why this wouldn't continue to drift lower week over week?

[johnathamilton]

Dividend payout is middle of next week. I doubt any institutions own this stock. It is too small a market cap and illiquid. The multiple voting share structure needs to be dissolved and professional management brought in. Currently it appears to be a milch cow for certain members of the Peller family. 

[johnathamilton]

Market is pricing either a dividend freeze or a cut. Until the P/L picture gets fixed, this stock is going nowhere. Really need to deal with the bloated SG&A expenses, or grow the top line without increasing SG&A.

[Stonksonlyup90]

I don't foresee a dividend cut/freeze, they've endured similar margins in '08 and they will see this through to the other side... while there is certainly room for improvement, they are paying the dividend out of earnings and its well covered by cash flow (even on these compressed margins/elevated SG&A). On the last CC, the CEO stated the fair value of their properties are roughly

[Yohhhh]

I find that management sound pretty good during meeting calls. They mostly address my concerns on the calls but when I see the financial results, I am always dissapointed. If managment can execute on what they say, I think Andrew Peller Limited is a good buy (Revenue to go up from 5% from 2021 before price increases, better environment for canadian wine producers, reducing the COGS and well valued

[johnathamilton]

Another day, another disappointment. Investors are liquidating their positions on this stock. Wouldn't be surprised to see them take it private at this level.  Market Cap is only about $250MM and they already have substantial holdings.  What a reward for management incompetence.

[Stonksonlyup90]

Trading below Book Value now.. don't think it's been at these levels in the last decade?... I wasnt expecting it to trade this low! I'll continue to add to my position here. I believe they're marketing a property in Vancouver area for $50M?.. a sale and pay down of debt would be beneficial.. Do these guys not have an up to date investor presentation? Can't find anything on

[CanuckDad]

What leverage would Class A shareholders have in this scenario? Can they buy out at current market price unilaterally?

[CanuckDad]

Hard to follow what the strategy is beyond we need to get our margins back up from the high 30s to the mid-40s.

[Stonksonlyup90]

Agreed, an investor presentation would go a long ways in detailing their plan. It sound like with the recent CFO hire that perhaps they've fallen behind on implementing tech that can streamline operations?? US peers trade at multiples more than 2x ADW - maybe they should have find a dance partner south of the border ... (we all know that'll never happen)

[johnathamilton]

The problem with ADW is that their earnings momentum is downward. There seems to be some buying now (finally) in the 5.50-6.00 range. I'd buy more, but I'm already over weight and my average cost is well below the current SP.