Fill the Shopping Cart at Metro?
Metro Inc. is a food retailer in Quebec and Ontario, where it operates 564 supermarkets under Metro, Metro Plus, Super C and Food Basics, as well as 257 pharmacies under the Brunet, Pharmacy and Drug Basics banners. The Company also acts as franchisor and distributor for 179 franchised Brunet Plus, Brunet, Brunet Clinique, and Clini Plus drugstores, owned by independent pharmacists.
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Metro is among the Top 10 Purple Chip stocks on the TSX. The shares have been under pressure due to increased competition by Target and Wal-Mart in the Canadian grocery scene.
As is often the case, we are attracted to quality stocks that are beaten up. We believe that current valuation is attractive and represents a low risk entry point.
Purple Chips 12 – 18 month target: $67.00
LOW VALUATION IN METRO AT $61.00 (MRU-T, $CAD 60.95) FULL POSITION
PURPLE CHIPS TARGET: $67.00 POSITION SIZE: FULL (5.0%) P/E: 11X DIV: $1.00 (1.6%) MKT CAP: $5.58B Debt:$500M RETURN ON CAPITAL: 53.5% EARNINGS YIELD: 11.1% 5 YR EPS Growth rate*:13.0% P/E/G Ratio: 0.93X EPS: $4.92 2014 EST.: $5.31 2015 EST.: $5.51
*Blended growth rate= 2/3 historical (5yrs), 1/3 forward.
