TSXV:RUM

Stock Analysis Report

Executive Summary

Rocky Mountain Liquor Inc., through its subsidiary, Andersons Liquor Inc., owns and operates liquor stores in Canada.

Rewards

Trading at 94.5% below its fair value

Became profitable this year

Risk Analysis

Interest payments are not well covered by earnings

Shareholders have been substantially diluted in the past year

Does not have a meaningful market cap (CA$2M)

Highly volatile share price over past 3 months

+ 1 more risk


Snowflake Analysis

Undervalued with questionable track record.

Share Price & News

How has Rocky Mountain Liquor's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RUM's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0%

RUM

1.8%

CA Consumer Retailing

1.6%

CA Market


1 Year Return

-82.2%

RUM

14.5%

CA Consumer Retailing

9.9%

CA Market

Return vs Industry: RUM underperformed the Canadian Consumer Retailing industry which returned 12.1% over the past year.

Return vs Market: RUM underperformed the Canadian Market which returned 10.4% over the past year.


Shareholder returns

RUMIndustryMarket
7 Day0%1.8%1.6%
30 Day0%2.4%2.9%
90 Day-27.3%2.8%6.4%
1 Year-82.2%-82.2%16.0%14.5%13.5%9.9%
3 Year-90.0%-90.0%33.3%21.2%17.4%6.7%
5 Year-86.7%-86.7%58.1%40.1%36.5%16.4%

Price Volatility Vs. Market

How volatile is Rocky Mountain Liquor's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Rocky Mountain Liquor undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RUM (CA$0.04) is trading below our estimate of fair value (CA$0.72)

Significantly Below Fair Value: RUM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RUM is good value based on its PE Ratio (0.3x) compared to the Consumer Retailing industry average (19x).

PE vs Market: RUM is good value based on its PE Ratio (0.3x) compared to the Canadian market (15.8x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate RUM's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: RUM is good value based on its PB Ratio (0.4x) compared to the CA Consumer Retailing industry average (1.8x).


Next Steps

Future Growth

How is Rocky Mountain Liquor forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

7.3%

Forecasted Consumer Retailing industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Rocky Mountain Liquor has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Rocky Mountain Liquor performed over the past 5 years?

-17.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RUM has a large one-off gain of CA$3.4M impacting its September 30 2019 financial results.

Growing Profit Margin: RUM became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: RUM has become profitable over the past 5 years, growing earnings by -17.2% per year.

Accelerating Growth: RUM has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: RUM has become profitable in the last year, making it difficult to compare its past year earnings growth to the Consumer Retailing industry (-10.8%).


Return on Equity

High ROE: Whilst RUM's Return on Equity (44.99%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Rocky Mountain Liquor's financial position?


Financial Position Analysis

Short Term Liabilities: RUM's short term assets (CA$6.6M) do not cover its short term liabilities (CA$11.0M).

Long Term Liabilities: RUM's short term assets (CA$6.6M) do not cover its long term liabilities (CA$11.0M).


Debt to Equity History and Analysis

Debt Level: RUM's debt to equity ratio (160.3%) is considered high.

Reducing Debt: RUM's debt to equity ratio has reduced from 203% to 160.3% over the past 5 years.

Debt Coverage: RUM's debt is not well covered by operating cash flow (14.2%).

Interest Coverage: RUM's interest payments on its debt are not well covered by EBIT (0.5x coverage).


Balance Sheet

Inventory Level: RUM has a high level of physical assets or inventory.

Debt Coverage by Assets: RUM's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

What is Rocky Mountain Liquor's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.9%markettop25%5.4%industryaverage1.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate RUM's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate RUM's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if RUM's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if RUM's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of RUM's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

What is the CEO of Rocky Mountain Liquor's salary, the management and board of directors tenure and is there insider trading?

5.7yrs

Average board tenure


CEO

Allison Radford (40yo)

0.8yrs

Tenure

CA$161,369

Compensation

Mrs. Allison Radford (Alternate name-Allison Marie Byrne) served as Chief Operating Officer of Rocky Mountain Liquor Inc. since December 1, 2008 until 2019 and has been its Chief Executive Officer since Ap ...


CEO Compensation Analysis

Compensation vs Market: Allison's total compensation ($USD123.51K) is about average for companies of similar size in the Canadian market ($USD165.67K).

Compensation vs Earnings: Allison's compensation has been consistent with company performance over the past year.


Board Age and Tenure

5.7yrs

Average Tenure

55.5yo

Average Age

Experienced Board: RUM's board of directors are considered experienced (5.7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$2,26104 Sep 19
Peter Byrne
EntityIndividual
Role
Chairman of the Board
Executive Chairman & President
Shares30,200
Max PriceCA$0.075
BuyCA$29,99903 Sep 19
Peter Byrne
EntityIndividual
Role
Chairman of the Board
Executive Chairman & President
Shares300,000
Max PriceCA$0.10
BuyCA$26,23530 Aug 19
Peter Byrne
EntityIndividual
Role
Chairman of the Board
Executive Chairman & President
Shares349,800
Max PriceCA$0.075
BuyCA$25506 Aug 19
Peter Byrne
EntityIndividual
Role
Chairman of the Board
Executive Chairman & President
Shares3,400
Max PriceCA$0.075
BuyCA$2,89501 Aug 19
Peter Byrne
EntityIndividual
Role
Chairman of the Board
Executive Chairman & President
Shares38,600
Max PriceCA$0.075
BuyCA$188,44615 Jul 19
Peter Byrne
EntityIndividual
Role
Chairman of the Board
Executive Chairman & President
Shares1,880,000
Max PriceCA$0.10
BuyCA$73,47105 Jul 19
Peter Byrne
EntityIndividual
Role
Chairman of the Board
Executive Chairman & President
Shares979,600
Max PriceCA$0.075

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 71.3%.


Management Team

  • Peter Byrne (65yo)

    Executive Chairman & President

    • Tenure: 0.8yrs
    • Compensation: CA$176.37k
  • Allison Radford (40yo)

    CEO & Director

    • Tenure: 0.8yrs
    • Compensation: CA$161.37k
  • Sarah Stelmack

    Chief Financial Officer

    • Tenure: 8.8yrs
    • Compensation: CA$125.06k

Board Members

  • Frank Coleman (65yo)

    Lead Director

    • Tenure: 0.8yrs
    • Compensation: CA$24.00k
  • Rob Normandeau (46yo)

    Independent Director

    • Tenure: 12.2yrs
    • Compensation: CA$20.00k
  • Peter Byrne (65yo)

    Executive Chairman & President

    • Tenure: 0.8yrs
    • Compensation: CA$176.37k
  • Allison Radford (40yo)

    CEO & Director

    • Tenure: 0.8yrs
    • Compensation: CA$161.37k

Company Information

Rocky Mountain Liquor Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Rocky Mountain Liquor Inc.
  • Ticker: RUM
  • Exchange: TSXV
  • Founded:
  • Industry: Food Retail
  • Sector: Consumer Retailing
  • Market Cap: CA$1.900m
  • Shares outstanding: 47.49m
  • Website: https://www.ruminvestor.com

Location

  • Rocky Mountain Liquor Inc.
  • 11478 149 Street
  • Edmonton
  • Alberta
  • T5M 1W7
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RUMTSXV (TSX Venture Exchange)YesCommon SharesCACADDec 2008

Biography

Rocky Mountain Liquor Inc., through its subsidiary, Andersons Liquor Inc., owns and operates liquor stores in Canada. Its stores sell beer, wine, spirit, and ready to drink products, as well as ancillary items, such as juice, ice, soft drinks, and giftware. As of April 30 2019, it owned and operated 29 private liquor stores. The company is headquartered in Edmonton, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/18 00:08
End of Day Share Price2020/01/09 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.