Loblaw Conclusion

Summary: All indications are that informed investors would consider this an under valued stock.

One Analysts View: "Loblaws had a tough year last year with soft sales during the summer period, mainly due to distribution problems. Yet, they've really done some good work in terms of integrating new distribution centers and it seems they've sacrificed profits to reorganize to cut costs by shutting down warehouses and consolidating offices. So I think they've absorbed some short-term pain to position themselves to be able to fight off a competitor such as Wal-Mart. I think the stock has been oversold. Based on the price, I think this company has some legs and I think the share price will come back."

Another: Nobody is writing off Loblaw. "We believe it's an undervalued holding with a tremendous amount of potential for upside," says AIC. The retailer has a strong foundation and valuable assets. It is better positioned to fend off Wal-Mart than were American grocers, the first line of defence being the company's own discount chains. Unlike many retailers, Loblaw owns most of its real estate. Its President's Choice bank is popular, and draws customers back to the stores with its loyalty program. (In fact, Loblaw may eventually introduce a broader loyalty program.) Meanwhile, Joe Fresh is showing signs of becoming a draw on the non-food side.