Finl data: 3Q08 remain strong, sales up 9.8% compare to 3q07, net income up 15.6%. Mainly due to total store square feet rise 12.6% and gross margin improved from 10.7% to 11.2%.
Issues: More capital spending in future if Shopper would like to keep up the growing momentum under the economy difficult situation. On the other hand, it continue to have the dominate position for drug store in Canada. Plus job creation, profit growth in health sector remain healthy at this stage compare to all other sectors.
Comment: Based on estimate 08 EPS $2.61, current price seem a quite higher compare to US drug store such as CVS Caremark or Walgreen. Therefore, from a value investing prospective, it only worth $34per share. If I add growth as one of the evaluation factor, it should worth $57.42 based on historical P/E ratio.
11.11.2008
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