Corby Spirit and Wine Update – $CSW/ & $CSW/

It’s almost been a year since I kicked off dedicating more time to blogging since the covid lockdowns. I have toyed with the idea of having a dividend paying portfolio cover more and more of my living expenses. To be honest, I’m still on the fence. I have debating creating a 10-12 stock dividend portfolio for tracking purposes. Anyways, here’s a quick update on Corby.

Since posting about Corby in May 2020, shares have underperformed the TSX and several dividend focused ETFs. Also, everyone was getting rich off bitcoin except you and me. The performance below doesn’t include dividends.

As expected, Corby has weathered Covid well. Surprise surprise but people kept drinking throughout the (various degrees of) lockdowns. Revenue has been maintained and profitability hasn’t been impacted.

I went over the business in more detail in the previous post so I won’t repeat myself here. Basically, I view the business as very stable and long term demand for their products to grow with GDP. The CEO has been in place for a year and has done well (in my opinion) navigating the pandemic.


I’m going to spend some additional time looking at their dividend payouts and policy.

The dividend policy is to pay out 90% of earnings in the previous fiscal year. They have also paid some special dividends out over the years.

In the last 5 and 10 years they have paid out 30 mil and 112 mil ($1.06 and $4.07 per share) in special dividends.

Here is a quick look at the historical payout ratio of Corby. FCF is likely overstated as they have been lowering their capital expenditures since covid to preserve capital.

With a little more visibility on the (eventual) reopen in Canada, I would expect the dividend to increase and potentially pay out a smaller special dividend.


A quick look at absolute valuation is below. Forward numbers are my estimate for fiscal 2021 which is over in a few months.

Relative to where Corby has traded, it’s a slight discount to mean for P/S and EV/EBITDA.


  • valuation is not cheap
  • there could be an issue with one of the brand’s they market
  • people could drink less in the future compared to today (perhaps increase their consumption of cannibis)
  • the B shares are non-voting


Not ridiculously cheap and not expensive. Perhaps dividend paying stocks will have a tougher time if/when interest rates move up. Corby is not a debt heavy company that has a large portion of operating earnings going towards servicing debt.

Anyone own or have an opinion on CSW?



*the author does not have a position in $CSW/ or $CSW/

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March 2021 Update – $OSS.v, $REPH, $ISDR, $, $, $STC.v, $, $, $, $MTLO.v, $DWSN, $SVT, $, $


I use TIKR to quickly look through ideas and check comparable companies. Would recommend. Referral code below.


I was a guest on In The Market Trenches podcast this past month. Have a look/listen.



Thoughts on Market Activity

Once a month I write in my investment journal to attempt to capture my current thoughts on the public markets. It’s not a forecast and I am not a macro guy. It is a quick snapshot of what is happening in real time and how I’m processing it.

This month I made note of how the broader market seems to continue to rotate out of “what worked in 2020”/SaaS/lockdown names and into “recovery” companies. The S&P ended up 7.4% YTD, while the TSX ended up 6.7%. The Russel 2000 has now outperformed the Nasdaq comp over the ttm. The disordered pace of covid vaccine distribution seems to be creating lots of noise. As well, there are many that are very concerned about variants and their implications on the healthcare system. It is interesting to experience in real time. This goes without even mentioning NFT, crypto, EVs, etc. Such things I have no business commenting on.

I continue to find some interesting opportunities in more cyclical companies, although these usually amount to more and smaller positions. As always looking for businesses with long term potential, with incentivized management and a reasonable valuation is the main goal and will constitute the largest amount of my energy. Of course, building positions in such businesses takes continuous effort on the bid as they tend to be illiquid.

Building wealth in the most reasonable way for me is not always the optimal way in the short term.

Posts this month

Quick Notes on Companies Recently Mentioned

  • OneSoft Solutions ($OSS.v)
    • Announced an acquisition of IP
      • Not a ton of details
      • They are usually very thorough on MD&A’s so likely to get more color then
    • Posted Q4 2020 results
      • In line with my expectations
      • MD&A is a must read to understand the value proposition
  • Recro Pharma ($REPH)
    • As mentioned before, I have sold but continue to monitor
  • Issuer Direct ($ISDR)
    • Released Q4 2020
      • Results were good
      • Continue to hold my position
  • Pulse Seismic ($
    • Reported auditor change
      • Non event as it was board approved
    • Lots of volume on March 12
  • Information Services Corp ($
    • Released Q4
      • Business is holding up well
      • Margins have ticked up a bit
      • With the Paragon acquisition they are getting more revenue from services
      • Some delays due to covid, but it didn’t sound like anything major
      • Interesting company
  • Sangoma Technologies Corp ($STC.v)
    • Officially closed the acquisition of Star2Star
  • Firan Technology ($
    • Polar Asset Management sales
      • 528k shares sold from Jan 8 to Feb 12
      • About 50% of the trading volume
      • They now own about 9% of the outstanding shares
  • Viemed ($
    • Reported Q4
      • Still executing well
      • The covid related one time revenue will run off
      • Call indicated that they can return to historical growth rates once we are fully reopen
  • Sylogist ($
    • Received conditional approval to list on TSX from TSXV
    • Acquisition of MAS (Municipal Accounting Systems) and new credit line
      • 37.8 mil in cash
      • 7.4 mil rev
      • 4.3 mil ebitda
      • Will be immediately accretive
    • Held a call after the acquisition
      • Will list on TSX shortly
      • Integration of MAS 90-120 days
      • Key employees staying on post integration
      • Investing in sales and marketing to expand MAS geographically
    • Announced they will list on TSX
  • Martello Technologies Group Inc ($MTLO.v)
    • They announced a private placement concurrent with the bought deal
      • This was closed and mgmt. participated for about 1 mil
    • I have sold my shares at a small loss and will move on
      • I will continue to monitor for a few quarters
    • Announced strategic sales win
      • It sounds quite positive
  • Dawson Geophysical ($DWSN)
    • Reported Q4
      • As expected rev way down
      • Potential to recover further with O&G activity
  • Servotronics ($SVT)
    • Filed a notification of inability to timely file their 10-K (deadline was March 31)
      • Micorcaps are fun
  • FAX Capital ($
    • Announced a placement with QUIS
      • 16 mil shares at $1.25 for 20mil total
      • 1 year lock up
      • Able to nominate a board member
      • They should still have lots of cash left over after this
    • Closed Carson Dunlop acquisition and placement with QUIS
      • Also appointed a president (graham Badun) of a new platform company
      • Was president of Alarm Force
    • Q4 results posted
      • No surprises
      • Estimating they have about 45% cash in book value after the acquisition of PEO
  • Pizza Pizza Royalty Corp ($
    • Reported Q4 2020 – Not much to report
      • Ontario and Alberta have been under fairly strict lockdowns during the back half of the quarter
      • Non traditional is hurting
      • Payout ratio was 84%
      • They feel they can grow store count by 5% in 2021

The author is long $OSS.v, $ISDR, $, $STC.v, $, $ at time of writing.

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Viemed Quick Update – $ & $VMD

About 7 months ago I wrote about Viemed.

After a big bounce from the covid lows, shares are down 15-20% since I posted. Follow my ideas at your own risk.

And here is the performance of other things you could have purchased if you followed all the smartest accounts on Twitter. If your timeframe is 6 months, you probably are reading the wrong blog.

Although I’ve sent out a few updates on Viemed on the monthly updates, I think Viemed warrants some additional conversation.

VMD Adds Value to Stakeholders

Service to Patients

The high touch service model makes them very valuable to patients. The use of ventilators can be overwhelming, confusing and hard to keep up with. Recall that the vent patients are likely elderly and the use of a ventilator may not be the only treatment they are receiving. Having respiratory therapists (RTs) in the home with the patient increases compliance. The RTs are available around the clock to assist patients. The RTs are their to educate patients and build a trusting relationship. They are the first point of contact and face of Viemed for the patient.

Extending patient life

Proper patient education and compliance leads to higher quality of life. The patient also uses VMD products (likely a ventilator) longer. Use of non-invasive ventilators has been proven to extend patient life. A few years ago they stated that the average time the patients use a ventilator is 17 months. They have released data that every 6 patients they get on a vent saves a life.

Removing Costs

Treating patients at home rather than at hospital removes cost from the healthcare system. Treating patients at home where they can be around their loved ones is one thing, but there is also a reduction hospital readmissions. Hospital stays are expensive and consume valuable resources.

Growth Potential

Additional Services

The company has always provided more than NIVs to patients. The oxygen portion of the business has grown 100% in 2020 (albeit from a lower base). They expect it to grow quicker than the ventilator side of the business. Though margins are not as strong as NIV, the incremental cost is low and leads to high incremental ROIC.

They have also been able to provide specific product sales and support from COVID. Though this will eventually unwind, it demonstrates their ability to capitalize on opportunities.

Expand Geographically

They are currently in 38 states and have the opportunity to expand into new states. They could also penetrate further into the existing states they have a presence.


Though somewhat muted in the immediate term, the company has been investing heavily in technology to assist RTs in treating patients. They have also invested in systems to improve workflow for their employees. They have purchased 5% in VeruStat, a company focusing on remove patient monitoring.


There is always the chance that VMD acquires another business or product(s). Previously they had mentioned that they were looking at pediatric patients.

Partnership and Payor Diversification

They announced an alliance with Commonwealth Primary Care ACO in Arizona in February. There could be more partnerships like this with ACOs in the future.

They also have been approved to provide care for the VA (Veterans Affairs). They are working on demonstrating the savings that VMD will provide. This was delayed due to covid and is picking up again in April 2021.


  • Competitive bidding
    • The competitive bidding process for CMS services was paused due to the pandemic. In 2016 they took a 35% cut in reimbursement from Medicare. It took them several quarters to outgrow the cut. Home medical equipment was removed from the competitive bidding process in 2021.
  • Lower than expected growth
    • whether it’s from covid or other reasons, a slower growth rate could cause the share price to re-rate into “deep value” territory.
  • Key person
    • Casey Hoyt (CEO) was one of the founders of the company. He has been there since day one and has a material amount of his net worth tied up in the business. If he left, I would view it as a negative event.
  • Bad debt expense
    • As their patients are at end of life, there can be some significant swings in bad debt expenses. They have guided for 9-13% range. They could have a instance of greater than 13% of revenue spent on bad debt. Thought I feel it’s unlikely as they have gotten better at collections and monitoring patients, it’s a risk to monitor.

What needs to happen to make money

In my opinion, VMD is a company that you need some patience with. If they have growth opportunities, they will take the opportunity to invest via the income statement and cash flow statement. This could hurt profitability in the short term. I do think that the business could outperform the stock over the next few years. To me, VMD is not a company to trade but to own.

Given all the growth levers, VMD is looking to get back to pre-covid growth levels. If they can return to that rate (or even close to it) of growth, I think the current share price is a bargain. The company is trading around 10x forward EV/EBITDA today.

I feel that VMD is a high quality business providing a valuable service to it’s customers, has lots of TAM, incentivized owner-operators, and is not at the valuation where I would sell it.



*I am long shares of VMD at time of writing

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