Transferring Coverage

Research evidence excerpt

Transferring Coverage

unt relative expected sales growth,

earnings growth, cash flow generation, balance sheet strength, management quality, earnings

volatility, and other factors. We backstop our Price/Sales valuation range using EV/Sales

calculations and comparisons.

Investment Risks

Retailers

The markets in which retailers in our coverage universe operate are very competitive. These

retailers face risks and uncertainties from deteriorating consumer spending, intensifying

competition, labour relations and availability, the ability to pass on cost inflation (including

merchandise, wages, transportation, insurance, occupancy costs), supply chain disruptions,

changes to government regulations, class action lawsuits and fluctuating currencies and

commodity prices.

Food Manufacturers and Processors

Food manufacturers and processors are exposed to risks and uncertainties from various factors

including currency and commodity price swings, consumer health and willingness/ability to

pay higher prices necessitated by cost inflation (including input costs, wages, transportation,

occupancy costs), customer and supplier concentration, labour relations and availability,

competitive pressures, international expansion risks, food safety issues and their impact on

brand value, negative scientific/clinical findings, product development delays or failures,

changes in regulations and compliance requirements, changes in international trade relations,

weather, acquisitions that do not add shareholder value, quality and availability of input, and

class action lawsuits.

Cannabis

Cannabis remains an emerging industry globally and is subject to stringent regulations. Only

a handful of countries have legalized commercial sale of medical cannabis, and even fewer

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