Rocky Mountain Liquor Inc V.RUM

Triple AAA bond like business

[Ferociousbear]

The management got themselves into trouble with expensive debt to finance the expansion. The agressive expansion was a mistake in this mature industry. Now, they only own profitable locations and looks like they are finished with selling stores. The debt is borrowed at prime + 1.5% which is below current inflation. It is hard to see what would disrupt the company significantly enough at this point. Show me a safer investment from value perspective.

[Fansse]

What's your price target? The business slowly but surely becomes 'risk free' I feel with the recurrent strong quarters. It seems like the market is not impress or it doesn't have any weight on the valuation of the business. I'm quite astonished that the value is going threading down.  How many times cash flow, earnings does a mature business generally trade to? 

[Ferociousbear]

Assuming conservative 5% same store sales growth per year we can conservatively assign P/E of 10. In my opinion, it should be traded around 30 cents per share. Low market cap and liquidity scares potential investors away. I am curious to see where strategic review is going to take RUM.V. If no sale of the company, then the BoD should pay dividend. The company can afford 1 cent annual dividend