Liquor Stores N.A. LTD. still in an uptrend

Jul 9th, 2012 – Comment

Nothing at this point is suggesting that the current advance is about to reverse itself.


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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Hello Lou,

I always appreciate your viewpoints and you have helped me to become a better investor ! Would you be able to have a look at LIQ.T for me ? I am looking for a conservative dividend play – what do you think ?

Thanks Lou !

Mario

 

Hey Mario,

Thanks for your kind words they are very much appreciated! Liquor Stores N. A. Ltd. (LIQ TSX) operates a chain of 240 retail liquor stores in Alberta, British Columbia, Alaska, and Kentucky. The bulk of their locations are in Alberta so you have geographic risk to consider. In addition you have to look at their market capitalization of $425 million which by definition makes LIQ a small cap stock. The smaller the capitalization the higher the risk.

A review of the charts will provide greater evidence to see if this stock meets your investor profile.

 

 

The three-year chart indicates that over the last nine months investors have been bidding up the shares as they recovered from the October 2011 lows. Of note is the golden cross that formed in December of 2011 when the shares were trading at $14.50.  A golden cross is a sign that investors see more opportunity in a stock. Retrospectively that is exactly what has transpired.

 

 

The six-month chart depicts the support that the shares have been testing along the 50-day moving average. Every test has been met with increased buying driving the stock higher.

Nothing at this point is suggesting that the current advance is about to reverse itself. Does that mean you should buy it and never look at it again? No it never does.

As I tell my Introduction to Finance students at Sheridan College, treat your stocks like a puppy. Watch and interact with it every day! Check the data stream for news and information and examine the charts to make sure the trend is still supporting your decision to invest.

What you have to determine is whether a small cap stock with geographic concentration meets your investment criteria.

Make it a profitable day and happy capitalism!

 

 

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