TSX:SCU

Stock Analysis Report

Executive Summary

The Second Cup Ltd. operates as a specialty coffee retailer in Canada.

Snowflake

Fundamentals

Excellent balance sheet with questionable track record.

Risks

  • Second Cup is not covered by any analysts.

Share Price & News

How has Second Cup's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

7.1%

TSX:SCU

1.0%

CA Hospitality

1.2%

CA Market


1 Year Return

-44.7%

TSX:SCU

-18.6%

CA Hospitality

-0.1%

CA Market

SCU underperformed the Hospitality industry which returned -18.7% over the past year.

SCU underperformed the Market in Canada which returned -0.2% over the past year.


Share holder returns

SCUIndustryMarket
7 Day7.1%1.0%1.2%
30 Day-12.2%7.4%4.0%
90 Day-10.1%-2.8%1.4%
1 Year-44.7%-44.7%-18.1%-18.6%3.4%-0.1%
3 Year-35.2%-35.2%22.1%18.8%19.3%8.6%
5 Year-54.7%-54.7%-1.7%-4.6%19.0%2.0%

Price Volatility Vs. Market

How volatile is Second Cup's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Second Cup undervalued based on future cash flows and its price relative to the stock market?

35.59x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Second Cup's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).

Second Cup's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).


Price Based on Earnings

Second Cup is overvalued based on earnings compared to the CA Hospitality industry average.

Second Cup is overvalued based on earnings compared to the Canada market.


Price Based on Expected Growth

Unable to calculate PEG ratio for Second Cup, we can't assess if its growth is good value.


Price Based on Value of Assets

Second Cup is good value based on assets compared to the CA Hospitality industry average.


Next Steps

Future Growth

How is Second Cup expected to perform in the next 1 to 3 years based on estimates from 0 analysts?

76.6%

Forecasted Consumer Services 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 Second Cup 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 Second Cup performed over the past 5 years?

64.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Second Cup has delivered over 20% year on year earnings growth in the past 5 years.

Second Cup has become profitable in the last year making the earnings growth rate difficult to compare to the 5-year average.

Second Cup has become profitable in the last year making it difficult to compare the CA Hospitality industry average.


Return on Equity

Second Cup has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Second Cup used its assets less efficiently than the CA Hospitality industry average last year based on Return on Assets.


Return on Capital Employed

Second Cup has become profitable over the past 3 years. This is considered to be a significant improvement in its use of capital (Return on Capital Employed).


Next Steps

Financial Health

How is Second Cup's financial position?


Financial Position Analysis

Second Cup is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Second Cup's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

Second Cup has no debt.

Second Cup has no debt compared to 5 years ago when it was 25.6%.

Second Cup has no debt, it does not need to be covered by operating cash flow.

Second Cup has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Low level of unsold assets.

Second Cup has no debt, it does not need to be covered by short term assets.


Next Steps

Dividend

What is Second Cup's current dividend yield, its reliability and sustainability?


Dividend Yield and Payments Analysis

Unable to evaluate Second Cup's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.

Unable to evaluate Second Cup's dividend against the top 25% market benchmark as the company has not reported any payouts.

Unable to perform a dividend volatility check as Second Cup has not reported any payouts.

Unable to verify if Second Cup's dividend has been increasing as the company has not reported any payouts.


Current Payout to Shareholders

Unable to calculate sustainability of dividends as Second Cup has not reported any payouts.


Future Payout to Shareholders

Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.


Next Steps

Management

What is the CEO of Second Cup's salary, the management and board of directors tenure and is there insider trading?

3.1yrs

Average management tenure


CEO

Steve Pelton 0

0.3yrs

Tenure

0

Mr. Steven J. Pelton, Sr., also known as Steve, is Chief Executive Officer and President of The Second Cup Ltd since May 31, 2019 and June 2019 respectively. Mr. Pelton serves as Senior Vice President Land ...


Management Age and Tenure

3.1yrs

Average Tenure

The tenure for the Second Cup management team is about average.


Board Age and Tenure

2.3yrs

Average Tenure

58yo

Average Age

The average tenure for the Second Cup board of directors is less than 3 years, this suggests a new board.


Insider Trading

More shares have been bought than sold by Second Cup individual insiders in the past 3 months, but not in substantial volumes.


Recent Insider Transactions

BuyCA$3,88719 Jun 19
Catherine Lee
EntityIndividual
Shares2,300
Max PriceCA$1.69
BuyCA$8,93419 Jun 19
Melinda Lee
EntityIndividual
Role
Member of the Board of Directors
Director
Shares5,300
Max PriceCA$1.69
BuyCA$4,17506 Jun 19
Ba Le
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares2,500
Max PriceCA$1.67
BuyCA$67,02701 Jan 19
Tail Wind Advisory & Management Ltd.
EntityCompany
Shares38,400
Max PriceCA$1.75

Ownership Breakdown


Management Team

  • Vanda Provato

    Vice President of Marketing & Category

    • Tenure: 5.2yrs
    • Compensation: CA$294.05k
  • Steve Pelton

    President & CEO

    • Tenure: 0.3yrs
  • Ted Tai

    Vice President of Operations

    • Tenure: 4yrs
    • Compensation: CA$221.76k
  • Ba Le

    Chief Financial Officer

    • Tenure: 2.3yrs
    • Compensation: CA$291.50k

Board Members

  • Michael Bregman

    Chairman

    • Tenure: 5.8yrs
    • Compensation: CA$150.00k
  • Aaron Serruya (53yo)

    Director

    • Tenure: 2.1yrs
    • Compensation: CA$25.00k
  • Alan Simpson (58yo)

    Director

    • Tenure: 5.8yrs
    • Compensation: CA$25.00k
  • Alton McEwen (76yo)

    Director

    • Tenure: 5.8yrs
    • Compensation: CA$30.00k
  • Garry MacDonald (72yo)

    Director

    • Tenure: 2.6yrs
    • Compensation: CA$582.68k
  • Stephen Kelley

    Director

    • Tenure: 0.08yrs
    • Compensation: CA$13.00k
  • Michael Serruya (54yo)

    Director

    • Tenure: 2.1yrs
    • Compensation: CA$25.00k
  • Melinda Lee

    Director

    • Tenure: 1.5yrs
    • Compensation: CA$23.08k

Company Information

The Second Cup Ltd's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Second Cup Ltd
  • Ticker: SCU
  • Exchange: TSX
  • Founded: 1975
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: CA$30.196m
  • Shares outstanding: 20.00m
  • Website: https://www.secondcup.com

Number of Employees


Location

  • The Second Cup Ltd
  • 6303 Airport Road
  • 2nd Floor
  • Mississauga
  • Ontario
  • L4V 1R8
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SCUTSX (The Toronto Stock Exchange)YesCommon SharesCACADDec 2004
SCUP.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDDec 2004

Biography

The Second Cup Ltd. operates as a specialty coffee retailer in Canada. The company offers coffee products and beverages. As of December 29, 2018, it operated approximately 262 franchised and company owned  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/15 00:17
End of Day Share Price2019/09/13 00:00
Earnings2019/06/29
Annual Earnings2018/12/29


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.