Topic: How To Invest

Hi, Pat: Please give me your opinion on Colabor Group. Many thanks.

Article Excerpt

Colabor Group, $1.18, symbol GCL on Toronto (Shares outstanding: 27.5 million; Market cap: $31.6 million; www.colabor.com), is Canada’s third-largest foodservice distributor. The company sells to restaurants as well as institutions including hospitals, schools and government institutions, Its customers are mostly in Quebec, Ontario and the Maritimes: it’s the dominant operator in Quebec and the second biggest in Ontario. Colabor serves its clients through a network of 65 wholesalers and its own distribution facilities. In the three months ended March 21, 2015, Colabor’s revenue rose 9.1%, to $304.7 million from $279.3 million a year earlier. Excluding acquisitions, sales gained 2.9%. The company lost $0.23 a share, compared to $0.21. Colabor’s $176.3 million of long-term debt is a very high 6.1 times its $31.6-million market cap. The company has grown quickly, mainly through acquisitions. That has added debt and pushed up its goodwill and intangibles to $186.5 million, or a very high 6.4 times its market cap, raising the risk of future writedowns. The…