# Empire Company Limited (EMP.A)



## gmx (Apr 1, 2013)

It seems like tough sector right now plus the bad news but current price looks tempting. Anyone own or watching this stock?


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## leeder (Jan 28, 2012)

I've owned it in the past and sold way too early. It's in a very competitive space, but valuations are extremely attractive. Would not surprise me if it gets back in the mid-$70s if all goes well for the rest of the year. If they boosted the dividend or if the price goes to the high $50s-low $60s, I would buy.


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## PatInTheHat (May 7, 2012)

I've been watching as well. Almost every stock in this space is beat up and for good reason. I'm planning to wait on the sidelines until I see some improvements out of the sector.


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## lostwords (Feb 21, 2014)

I am also watching this stock and Loblaw as well. Will see how it all play out.


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## Westerncanada (Nov 11, 2013)

lostwords said:


> I am also watching this stock and Loblaw as well. Will see how it all play out.


I would highly recommend WN.TO George Weston Ltd.. the Food Side of the Loblaws business (and also majority stakeholder in LCL).. leading dividend stock in Canada for over twenty years, in addition there single largest competitor (Canada Bread) has just been purchased by mexican giant Bimbo.. which i feel will strengthen GWL's place in the Canadian market even deeper...


WN.TO has also had seasonal swings that are substantial but if you can get in the $55-$75 Range this stock is a good pick.. 

Back to the original post question on Empire.. my only concern for this company is typically all of these transition's have been messy and distracting from the business as well as the shareholders.. they also have a two year contract in place to supply target with fresh groceries (until target's able to build its own facilities in canada) and once this end's it will significantly dampen there fresh revenue and at that time I expect target to launch a more aggressive food platform once they have there own warehouse.


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## RBull (Jan 20, 2013)

From the Chronicle Herald Wed Mar12



> Empire soldiers on in grocer y war
> 
> Analysts point to poor Q3 after Safeway deal; Sobeys parent plans for the long ter m
> 
> ...


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## leeder (Jan 28, 2012)

Due to the heavy competition, all companies in the grocery space are challenged. With the outlook fairly equal, Empire and Metro are two names that I know trade at fairly decent valuations. It's a matter of finding which name has more potential to grow.


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## Time4earlyretirement (Feb 21, 2014)

Switched from MRU to L recently and has paid off. 

However MRU and EMP seem like they will be worth looking at again if they drop a little more.


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## Edgar (Mar 24, 2014)

Compared to MRU and L, EMP.A is looking pretty favourable imo. Can anyone let me know if there is a reason I should avoid in comparison to the other two?

I know the grocery sector is normally considered pretty cut-throat with slim margins, but aside from that


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## spongewen (Nov 26, 2015)

Big drop today, bought some shares at the open, valuation is quite attractive.


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## CPA Candidate (Dec 15, 2013)

It's pretty scary when it is necessary to write off billions from an acquisition made only 3 years ago. They paid too much and the business is struggling.

The market tends to like these deals when they happen, but there has been no value creation yet.


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## andrewf (Mar 1, 2010)

They paid too much, the acquisition is concentrated in a market that will be economically depressed, and they bungled the integration.


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## doctrine (Sep 30, 2011)

Still plenty of time for them to turn it around. If EMP got low enough, I'd consider jumping in (definitely would have to be below $20, preferably $17-18). Would much rather buy a beat up grocer than Metro or Loblaws at 20+ earnings for 5% or less growth.


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## andrewf (Mar 1, 2010)

Yes. I'm not sure we've seen the end of the bad news though.


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## londoncalling (Sep 17, 2011)

I would be a buyer under $20.


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## blin10 (Jun 27, 2011)

might be a good hold here for the next 6 months to a a year


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## osman3500 (Apr 2, 2016)

*Attractive*

Obviously, sentiment is that of dislike towards this stock.However, after looking at the cashflows over the past 5 years and the current forward estimates, this stock looks quite attractive even at $22.

Even if we assume a long term 5% decline in cashflows, $22 looks fairly valued. I may pull the trigger soon on this. 

Any feedback is appreciated.


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## treva84 (Dec 9, 2014)

osman3500 said:


> Obviously, sentiment is that of dislike towards this stock.However, after looking at the cashflows over the past 5 years and the current forward estimates, this stock looks quite attractive even at $22.
> 
> Even if we assume a long term 5% decline in cashflows, $22 looks fairly valued. I may pull the trigger soon on this.
> 
> Any feedback is appreciated.


I would agree that ~ $22 represents fair value. Personally, I would wait but that's just my stinginess coming through.


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## osman3500 (Apr 2, 2016)

treva84 said:


> I would agree that ~ $22 represents fair value. Personally, I would wait but that's just my stinginess coming through.



I decided to hold off for a while as well with the safeway integration issues and the Alberta situation possibly taking a few quarters to sort out.


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## doctrine (Sep 30, 2011)

Broke down below $22, new 52 week low. Many consumer staples names have had a bad start to Q2.


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## treva84 (Dec 9, 2014)

doctrine said:


> Broke down below $22, new 52 week low. Many consumer staples names have had a bad start to Q2.


Hmm I was initially going to pick up some HLF but maybe I'll reconsider depending on how low EMP.A goes. I do think the valuation for HLF is more attractive although I like the business of EMP.A better.


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## osman3500 (Apr 2, 2016)

Yeah, it still actually performed considerably better than MRU


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## doctrine (Sep 30, 2011)

Epic $1B loss in the quarter for Empire, and more than $2B all told in the last year. That is a big loss on a $5-7B company.

http://www.stockhouse.com/news/pres...cal-2016-fourth-quarter-and-full-year-results

Heads should roll. They say losses are 'deepening', and not just out west. I don't think I'd jump in here, alhtough earlier I said it might be a buy below $20, I wouldn't really buy until the business has at least stabilized.


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## andrewf (Mar 1, 2010)

1 year return of -34% vs WN/L @ 11%/9% and MRU at 34%. 

Wow. Looks like MRU is about double the EV of EMP, despite having half the revenue. Wonder if EMP becomes a takeover target.


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## CPA Candidate (Dec 15, 2013)

As a whole the grocery business is not particularly attractive. It's brutally competitive and consumers change tastes quickly. Sobey's uses a fresh, higher quality/service, higher price model/strategy which withered badly when the economy in Western Canada weakened. Budget grocery shopping is back in style and that leaves Sobey's/Safeway out of step.


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## andrewf (Mar 1, 2010)

Not sure I agree. The big three grocery retailers all have diversified formats with discount and high service banners (for Sobeys it is Freshco and Price Chopper). I suspect the majority of Sobey's problems are in terms of execution and strategy.


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## GizelleGizelle (Jun 10, 2016)

it trades $19 per share now. Lat time it traded 19 bucks in 2012 (!!!!!). What a drastic drop!


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## dubmac (Jan 9, 2011)

CEO Poulin out!
http://www.theglobeandmail.com/repo...s-after-29-billion-writedown/article30816761/


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## thepitchedlinkagain (Jul 4, 2016)

*empire*

Anyone buying? I'm tempted


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## thepitchedlinkagain (Jul 4, 2016)

Down down down , what gives? Tempted to add some more


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## dubmac (Jan 9, 2011)

thepitchedlinkagain said:


> Down down down , what gives? Tempted to add some more


EPS looks scary. Wondering whether, or more likely when, they'll cut the dividend.


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## thepitchedlinkagain (Jul 4, 2016)

and down still......


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## doctrine (Sep 30, 2011)

They're at a 5 year low. Where is good value? 

My analysis suggests the current price is good value, with a potential downside of $13-14 a share and potential upside (once they turn around in a few years) of their all-time high. Decent risk vs reward scenario, the only negative is the downtrend is solidly intact, there's no reason not to wait for it to rise above a couple of the shorter term moving averages. I don't see a dividend cut, it's still very low at 2.3%.


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## Arnak (Feb 23, 2017)

I was checking the financial report that went out yesterday. Is it just me or are they kind of stabilizing their finance a bit? It's not looking great at all but it looks like the hemorrhage has stopped. Or maybe it's me who's too enthusiastic?


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## doctrine (Sep 30, 2011)

I looked and it looked like same stores sale decreases were accelerating, not decreasing. It seemed really negative. And the stock bounced. The same store sales decreases were across the board, not just out west. If they don't turn around quick, they'll turn an operating loss next year for sure.


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## AMABILE (Apr 3, 2009)

i thought it was good value, so bought in december 2016 @ $15.50 

near it's 52 wk low -- i'm up 16.66% to date

should i continue to hold for the long term ?


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## AMABILE (Apr 3, 2009)

I'm up to-day to 19.69%

I'll continue to hold for the long term

it's in my non-registered account 

collecting a 2.21% divvy


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## Arnak (Feb 23, 2017)

Newbie observation/comment: From what I can see, their finance are bad and remain bad one financial report after the other. Yet, share value keeps increasing this year. 

I'm puzzled about this. is there something I am missing?


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## andrewf (Mar 1, 2010)

Investors anticipating the turnaround. People do not invest based on the last quarterly report, they invest on their expectation of future reports.


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## AMABILE (Apr 3, 2009)

^^^^ very good answer andrewf


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## peterk (May 16, 2010)

What a rocket. Up 25% in 3 months. Wish I'd bought 1000 shares instead of 100, though.


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## Arnak (Feb 23, 2017)

andrewf said:


> Investors anticipating the turnaround. People do not invest based on the last quarterly report, they invest on their expectation of future reports.


Makes sense! I'm a little disapointed though lol. Disapointed cause I have been watching them for a while now, sure they would get better but waiting just to be sure. Oh well! Thanks


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## james4beach (Nov 15, 2012)

Does anyone else hold this? I'm getting destroyed on this position over the last 2 days, down 13%


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## dubmac (Jan 9, 2011)

james4beach said:


> Does anyone else hold this? I'm getting destroyed on this position over the last 2 days, down 13%


It missed earnings projections by around 0.48 per share. 
https://www.bnnbloomberg.ca/video/christine-poole-discusses-empire~1854308


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## andrewf (Mar 1, 2010)

james4beach said:


> Does anyone else hold this? I'm getting destroyed on this position over the last 2 days, down 13%


What attracts to you EMP? Are you a believer in the turnaround story? MRU seems to be the grocer with the most consistent performance.


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## james4beach (Nov 15, 2012)

andrewf said:


> What attracts to you EMP? Are you a believer in the turnaround story? MRU seems to be the grocer with the most consistent performance.


I thought the financial results were better than the negative sentiment implied (market under-valuing the company) when I last looked, but I'll have to review it again.


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## james4beach (Nov 15, 2012)

I did my annual review of my growth portfolio. Empire did not survive the screening, so I sold it.

Overall, my growth portfolio outperformed the TSX this year. Some turnover in positions is inevitable.


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## newfoundlander61 (Feb 6, 2011)

https://www.thetelegram.com/busines...expanding-further-into-western-canada-461222/


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## james4beach (Nov 15, 2012)

andrewf said:


> What attracts to you EMP? Are you a believer in the turnaround story? MRU seems to be the grocer with the most consistent performance.


I replaced my Empire position with MRU, eventually


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