Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 27 Mar, 25 | NWC | Buy | CAD 48.38 | CAD 50.799 | CAD 53.847 | 7 days | 11.3% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
The North West Company Inc., through its subsidiaries, engages in the retail of food and everyday products and services to rural communities and urban neighborhood markets in northern Canada, rural Alaska, the South Pacific, and the Caribbean. The company operates Northern stores, which offers food, financial services, and general merchandise; NorthMart stores that provides fresh food products, apparel, and health products and services; and Quickstop convenience stores that provides ready-to-eat food products, and fuel and related services. It also operates Giant Tiger junior discount stores, which offers family fashion, household products, and food products; Valu Lots discount center and direct-to-customer food distribution outlet; solo market, a store in remote market; Pharmacy and Convenience stores; and NWC Motorsports, a dealership that offers sales, service, parts and accessories for Ski-doo, Honda, Can-am and other premier brands. In addition, the company distributes produce and fresh meats to independent grocery stores; provides contract tele-pharmacist services to rural hospitals and health centers; and engages in the water and air-based transportation businesses. Further, it operates Alaska Commercial Company stores that provides food and general merchandise to remote and rural regions; Pacific Alaska wholesale, a distributor to independent grocery stores, commercial accounts, and individual households; Riteway food markets; and Cost-U-Less mid-size warehouse stores, which offers discount food and general merchandise. The company was founded in 1668 and is headquartered in Winnipeg, Canada.
Higher Gross Profit: CAD 214.1 mn in Q3 2024 vs CAD 205.3 mn in Q3 2023
Higher Sales: CAD 637.4 mn in Q3 2024 vs CAD 616.9 mn in Q3 2023
Higher Operating expense: CAD 160.0 mn in Q3 2024 vs CAD 149.6 mn in Q3 2023
Lower Cash from operations: CAD 55.6 mn in Q3 2024 vs CAD 71.1 mn in Q3 2023
Volatility in the price, regulatory risks, trade tarrifs, inflationary pressures, foreign exchange, labor shortages, etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 48.38 | 43.8 | 50.799 | 53.847 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Growing sales: The company's third quarter consolidated sales increased 3.3% to CAD 637.4 million compared to CAD 616.9 million last year driven by same store sales gains and the impact of new stores. On a same store basis, sales increased 4.0% compared to the third quarter last year led by a 4.9% increase in same store sales in Canadian Operations and a 2.7% increase in same store sales in International Operations.
Expanding range of essential products: The Company is focused on building an expanded range of essential products and services that help its customers. Furthermore, the group is investing to grow their business through store openings in new and existing markets, store renovations, refined merchandise assortments and expanded product categories and services.
An Income Play: The dividend pay-out practice translates into an essential factor for regular income-seeking investors with a long-term horizon. Recently the company paid a quarterly dividend of CAD 0.40 per share, on January 15, 2025. Moreover, at the last closing price of CAD 46.10 as on February 10, 2025, the stock offered a healthy dividend yield of 3.47%, which looks decent considering the current macros and interest rates.
Considering the expected valuation upside, decent growth in its sales and same store sales, expanding range of essential products, decent dividend yield, healthy guidance, current trading levels and key business risks a ‘Buy’ recommendation has been given on the stock at the last closing price of CAD 48.38, as on March 26, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Consumer Defensive Industry: Grocery Stores
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| NWC North West Company Inc |
-1.19 2.17% | 53.70 | 19.76 | 14.64 | 1.02 | 3.66 | 1.18 | 9.49 |
| L Loblaw Companies Limited |
-0.66 0.31% | 215.60 | 28.18 | 19.72 | 0.94 | 5.14 | 1.22 | 11.01 |
| WN George Weston Limited |
-3.97 1.51% | 259.37 | 25.97 | 17.64 | 0.50 | 5.43 | 0.83 | 7.33 |
| MRU Metro Inc. |
- -% | 103.79 | 21.07 | 18.18 | 0.90 | 2.79 | 1.10 | 11.85 |
| EMP-A Empire Company Limited |
- -% | 49.96 | 11.89 | 11.17 | 0.28 | 1.63 | 0.51 | 6.52 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 26,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
This report has been issued by StockNextt which has an Ontario Business Identification Number 1000958347 and British Columbia registration Number FM1051529 is a trade name under Kalkine Canada Advisory Services Inc. having Business Number 761925130BC0001. Kalkine Canada Advisory Services Inc. and StockNextt are collectively referred to as “StockNextt”, “we”, “us”, and “our”. The website https://stocknextt.com and associated pages are published by StockNextt. The information in this report and on the StockNextt website has been prepared from a wide variety of sources, which StockNextt, to the best of its knowledge and belief, considers accurate. StcokNextt has made every effort to ensure the reliability of information contained in its reports, newsletters, and websites. All information represents our views at the date of publication and may change without notice. The information in this report does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products. Our reports contain general recommendations for investing in securities and other financial products. StockNextt does not offer financial advice based upon your personal financial situation or goals, and we shall not be held liable for any investment or trading losses you may incur by using the opinions expressed in our reports, publications, market updates, news alerts and corporate profiles. StockNextt does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. StockNextt’s general advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested. Please also read our Terms and conditions for further information. Employees and/or associates of StockNextt and its related entities may hold an interest in the securities or other financial products covered in this report or on the StockNextt website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.
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