Shoppers Drug Mart (Symbol-SC) -- why so beaten down lately?
Shoppers Drug Mart (Symbol-SC) -- why so beaten down lately?
Bought this one at the IPO, its done well over the past few years, but its sat at $40 for almost a year now, and has even softened recently into the $38-$39 range.
Time to buy more? Or should I direct my attention elsewhere? Debt levels are very low (19 times earning coverage on the long-term debt). And this issue should benefit nicely from favourable dividend tax changes with respect to the income trust tax disparity.
Time to buy more? Or should I direct my attention elsewhere? Debt levels are very low (19 times earning coverage on the long-term debt). And this issue should benefit nicely from favourable dividend tax changes with respect to the income trust tax disparity.
- Shakespeare
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I don't follow it myself but here's a column by DeCloet.
Note that some people consider DeCloet to be a reliable contrary indicator.
Note that some people consider DeCloet to be a reliable contrary indicator.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
- Bylo Selhi
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Most analysts can be relied on to be contrary indicators some -- but alas, not all -- of the time. What we need is a consistent indicator of reliabilityShakespeare wrote:Note that some people consider DeCloet to be a reliable contrary indicator.
Sedulously eschew obfuscatory hyperverbosity and prolixity.
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I for one do not agree with that statement..but then it is only an opinion?Shopper's should be, but will not be, embarassed by all the crap that they have in their stores.
There is a lot more "crap" in other drug stores
Having said that, I sold my stock yesterday based on what I believe to be slow growth even when they do expand in Que. My son being a front store manager said that his store is still increasing sales.
A fool and his money are lucky to get togethere in the first place
Still nothing! The TSX is up a good 5-6% and this stock hasn't moved an inch! At $2/share EPS for 2006, this is priced at the market average, and has proven itself to be a good growth story as well.
Of course, the moment I sell or trim my position (to cut down on the margin interest I'm paying), it'll put on $10 in a month or two just like it did in 2004.
Of course, the moment I sell or trim my position (to cut down on the margin interest I'm paying), it'll put on $10 in a month or two just like it did in 2004.
Earnings up 18% year-over-year, dividend up 20%. Similar growth seen for next year, and minimal risk seen during the conference call.
"Irene Nattel, an analyst with RBC Capital Markets, said the operating performance at Shoppers was the strongest of any North American pharmacy chain during the quarter."
http://www.globeinvestor.com/servlet/st ... 8/GIStory/
Still not at its 52-week high, and $1.69/share gives it a trailing P/E of 26 which, coupled with a 18% growth rate, means this company is quite undervalued (TSX index has a trailing P/E of 20).
"Irene Nattel, an analyst with RBC Capital Markets, said the operating performance at Shoppers was the strongest of any North American pharmacy chain during the quarter."
http://www.globeinvestor.com/servlet/st ... 8/GIStory/
Still not at its 52-week high, and $1.69/share gives it a trailing P/E of 26 which, coupled with a 18% growth rate, means this company is quite undervalued (TSX index has a trailing P/E of 20).
- investor99
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Noticed this too, I didn't see any news.
It's starting to look reasonably attractive, however I would want more of a correction to get in.
I still think WAG in the U.S. is much cheaper. They just announced a 20% rise in earnings and the stock dropped to about a six month low.
Sometimes there is no explanation, just opportunity...
It's starting to look reasonably attractive, however I would want more of a correction to get in.
I still think WAG in the U.S. is much cheaper. They just announced a 20% rise in earnings and the stock dropped to about a six month low.
Sometimes there is no explanation, just opportunity...
The best time to plant an Oak tree was twenty five years ago. The second best time is now.
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Anyone looking at what the rest of the market is doing? Is it going up by any chance while Shoppers is going down?kjmcrae wrote:Shoppers is down ~ $1.20 today, but I have not seen any announcements to indicate why.
Is this just a "normal" correction? Has anyone heard anything?
A fool and his money are lucky to get togethere in the first place
- arthur
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My Dad has a ton of SDM, I am trying to get him to take some profits but his FA is cautioning him on Capital Gains Tax, at 88, who cares, his Estate will be paying a whole pile anyway.
I would be taking profits, wait until summer is over for a defined trend and interest rate announcements.
I would be taking profits, wait until summer is over for a defined trend and interest rate announcements.
You want the truth, you want the truth, you can't handle the truth.
The masses have never thirsted for the truth, whoever supplies them with illusions is their master, whoever supplies them with the truth, their victim.
If you do not risk anything , you risk even more. Jong
The masses have never thirsted for the truth, whoever supplies them with illusions is their master, whoever supplies them with the truth, their victim.
If you do not risk anything , you risk even more. Jong
- investor99
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- investor99
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A research report from CIBC gave a high rating for Shoppers, but also pointed out the following caveats:
- Shoppers is very expensive on a P/E basis, trading at 22.4 x 2007 earnings, which the highest multiple of any drugstore in North America. For comparison, Walgreen is trading at a much lower 20.6 x 2007 earnings.
- And then there is the Walmart threat. The CIBC report compared a basket of 16 common, high volume health and beauty items, and found that Shoppers prices were 25% above Walmart. As Walmart rolls out more Supercenters, and as Loblaw is forced to respond to Walmart, Shoppers will not be able to maintain that 25% price gap.
- Shoppers is very expensive on a P/E basis, trading at 22.4 x 2007 earnings, which the highest multiple of any drugstore in North America. For comparison, Walgreen is trading at a much lower 20.6 x 2007 earnings.
- And then there is the Walmart threat. The CIBC report compared a basket of 16 common, high volume health and beauty items, and found that Shoppers prices were 25% above Walmart. As Walmart rolls out more Supercenters, and as Loblaw is forced to respond to Walmart, Shoppers will not be able to maintain that 25% price gap.
- investor99
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Oh, don't even get me started on WAG....For comparison, Walgreen is trading at a much lower 20.6 x 2007 earnings.
WAG's latest earnings report was up 20%, they have zero debt, and their ROE is over 18%; they've also raised their dividend for 32 consecutive years. Their earnings growth track record is nothing short of phenomenal.
If anything they should be trading at the higher P/E. I guess if the U.S. consumer is expected to cut back..... it's all about expectations.
I'd consider Shoppers, Walgreen-Lite
Disclosure - I hold WAG.
The best time to plant an Oak tree was twenty five years ago. The second best time is now.
--
http://themoneygardener.com/
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http://themoneygardener.com/
I don't see Walmart, Loblaws or any other "supercentre" type business as a direct competitor against Shoppers. Strictly from a demographic standpoint; their target markets are very different and aggressively pursued with different tactics.
For a senior who's time is precious because of the abundance of activities they currently participate in (and will continue to increase their activities in) Shoppers offers more locations with easier access, more familiar surroundings and efficient tracking of prescription lists.
It's only my opinion, but I feel the superstores offer little covenience because of their massive size & scale to the target market which holds the "Golden Script" as I call it. I've felt for a long time that convenience will hold a premium over price for this market as their lives become more and more demanding on their schedule. No senior will want to trek 1-200m to get into a superstore from the parking lot, plus another good jog to the prescription centre vs. smaller, more focused locations that SC has strategically targeted in key areas of communities.
For a senior who's time is precious because of the abundance of activities they currently participate in (and will continue to increase their activities in) Shoppers offers more locations with easier access, more familiar surroundings and efficient tracking of prescription lists.
It's only my opinion, but I feel the superstores offer little covenience because of their massive size & scale to the target market which holds the "Golden Script" as I call it. I've felt for a long time that convenience will hold a premium over price for this market as their lives become more and more demanding on their schedule. No senior will want to trek 1-200m to get into a superstore from the parking lot, plus another good jog to the prescription centre vs. smaller, more focused locations that SC has strategically targeted in key areas of communities.
I find I am doing more shopping in our our local stand alone SDM than ever before. Milk/eggs etc are definitely cheaper than the grocery chains. The staff is well trained and the greetings as you come in the door is a plus and it is ongoing. I watch for this in every retail establishment because this is what I did in my former life, and it is not happening in other places, rarely can you find anyone to answer a question.
I have been buying all of our personal supplies from SDM, shampoo/haircolour/make-up/household cleaners/scripts and I don't hesitate to try some new products that are advertised because I know they will take them back without question, if I am not satisfied.
I love SDM, and should buy the stock.
[Some subsequent discussion split off to Catering to seniors ... - ModeratorA]
I have been buying all of our personal supplies from SDM, shampoo/haircolour/make-up/household cleaners/scripts and I don't hesitate to try some new products that are advertised because I know they will take them back without question, if I am not satisfied.
I love SDM, and should buy the stock.
[Some subsequent discussion split off to Catering to seniors ... - ModeratorA]
Sold mine today, moved the money to XIC.
Can't see how a P/E in the mid 20s, and a dividend yield of barely over 1% represents good value compared to the 4.5% paid by the TSX Composite Index, and its P/E of 10 or less. And WAG is melting down in the US and I don't see how that won't be repeated here.
Was a good ride though, especially at basically triple the IPO price in 2001.
Nothing wrong with the company or its long-term growth prospects. Purely a trade on valuation and my overall portfolio.
Can't see how a P/E in the mid 20s, and a dividend yield of barely over 1% represents good value compared to the 4.5% paid by the TSX Composite Index, and its P/E of 10 or less. And WAG is melting down in the US and I don't see how that won't be repeated here.
Was a good ride though, especially at basically triple the IPO price in 2001.
Nothing wrong with the company or its long-term growth prospects. Purely a trade on valuation and my overall portfolio.