I took a look at Andrew Peller’s latest earnings release. The stock is down and so I thought it might look more attractive.
Also they just announced that they just sold a piece of land in B.C. for $9.0 million that had a book value of $1.3 million. That’s intriguing because it is very easy to imagined that most of their land holdings are worth FAR more than book value. But then again, how relevant is that if they have zero intention of selling additional parcels of land? The B.C. situation was somewhat unique.
Unfortunately, their recent quarterly earnings for their Q1 ended June 30 were quite weak. Profits were WAY down but that was mostly due to added expenses associated with reopening of wineries to the public. That’s unfortunate but perhaps forgivable. But also of concern their revenues were down 6% and the explanation was that it had to do with pandemic-impacts. They claimed that Q1 in 2020 benefited from the pandemic. But sales in that quarter were only up 4.4% so it does not seem like such a tough comparable.
All in all, Andrew Peller is a fairly cheap stock. It remains profitable and should not have a lot of downside. The dividend seems quite safe but is only a 2.8% yield. But it’s in a tough business. Wine is generally cheap and that’s due in good part to cheap imports. They sell some high-end wine but it seems that the bulk of their business is in cheap brands. I own some Andrew Peller shares and do not plan to sell. But I will wait for a better quarterly report before buying more.