KeyStone’s Stock Talk Podcast Episode 119

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This week in our Your Stock, Our Take segment we start by taking a listener question on one of the leading online groceries in Canada, Goodfood (FOOD: TSX). The stock is up 24% over the last 5 trading days and up approximately 200% since the start of the year – we let you know why and if there is further potential in the stock. Our second YSOT is NorthWest Healthcare Properties REIT (NWH.UN: TSX), which holds 183 properties under management with a 97.3% occupancy rate. Its asset mix is around 55% hospitals & healthcare facilities and around 45% medical office buildings. The stock pays a strong 7% yield, and we let you know if it has growth potential. Our final YSOT comes in from a listener in reference to profitable Canadian micro-cap RIWI Corp. (RIWI: TSX-V). RIWI is an intriguing global trend-tracking and prediction technology firm, with a solid balance sheet and a focus on growing its recurring revenue base. A listener asks us if the company’s shares remain an opportunity.

Your Stock, Our Take

Goodfood Market Corp (FOOD: TSX)

Current Price: $9.00

Market Cap: $585 million

What does the company do?

Goodfood (TSX: FOOD) is a leading online grocery company in Canada. The company delivers fresh meals and grocery products to customers so they can enjoy delicious meals at home every week. The company commenced operations in 2014 and today reports 280,000 active subscribers. Goodfood has been publicly traded on the Toronto stock exchange since 2017. 

Key Points: 

Goodfood’s stock price has had a tremendous run this year and over the past week. The stock is up 24% over the last 5 trading days and up approximately 200% since the start of the year. 

I have to admit that was a paying customer of Goodfood in the past. Overall, I thought the service was good. You get a package of partially prepared food and recipes that you make throughout the week. The food was delicious. My main complaint was that the actual prep times were significantly higher than was stated by the company. But overall, I thought the service was good. It just didn’t work for my family of 5 so I discontinued but I would consider trying it again. 

But enough about me…let’s talk about what’s moving Goodfood’s stock price and if this will continue. 

Unlike many food delivery services, Goodfood has generated a good degree of financial success. The company’s subscriber count continues to increase which has led to strong revenue growth. In the company’s last quarter, they also reported positive net income for the first time.   

The COVID-19 pandemic has had an overall positive impact on Goodfood’s business, acting as a catalyst in the shift to e-commerce grocery shopping.

Financial Performance:

Goodfood’s fiscal Q3 results were released on July 8th.

  • Total revenue for the quarter was $86.6 million which was up 74% compared to the previous year. 
  • Adjusted EBITDA was $6.0 million compared to a lose of $2.3 million last year.
  • Net income was $2.7 million compared to a loss of $3.6 million.  
  • Operating cash flow for the quarter was $8.6 million compared to $2.3 million last year. 
  • The company announced on September 2nd that active subscribers had grown to 280,000 which is an increase of 40% year-over-year. 
  • The best way to value Goodfood is based on revenue since the company only has one quarter of positive earnings. At the current price, Goodfood is trading at a price to sales multiple of 2.4 times. 


Overall, we are actually very impressed with Goodfood and its performance. The story has been a big success so far. Subscriber counts and revenues continue to grow and the company reported its first quarter of positive earnings and adjusted EBITDA. 

One thing to watch out for is a slowdown in growth as the company starts to saturate its market. Goodfood already has 280,000 subscribers and the Canadian market is relatively small. The company also has some established competitors who will be fighting for a bigger piece of that market. New competitors will also enter the fray. As some point soon, we would expect the growth rate to slow. However, even with a slowdown in subscriber growth, the company still has runway to increase its subscriber count and should the opportunity to grow revenue and profit per customer. 

I don’t have many negative things to say about Goodfood. Fundamentally the company looks strong and its improving. The valuation to revenue is reasonable. It’s not currently a recommendation of KeyStone but certainly something that we can look at now that the company is starting to produce profitable quarters. 

Your Stock Our Take

Isaac via Email

What’s your take on NorthWest Healthcare Properties REIT?


NorthWest Healthcare Properties REIT (NWH.UN:TSX) 

Current Price: $11.42

Market Cap: $1.95 Billion

Yield: 7%

What does the company do?

NorthWest Healthcare Properties Real Estate Investment Trust is a Canadian open-ended trust with the strategic objectives to provide sustainable and growing cash distributions through investment in healthcare real estate in Australia/New Zealand, Brazil, Canada and Europe.

As at June 30th, 2020 the company had 183 properties under management with a 97.3% occupancy rate. Its Asset mix is about 55% hospitals & healthcare facilities and around 45% medical office buildings.

Recent Financial Results: (Q2, 2020)

  • Revenue was down -1.2% to $90.2 million, compared to the same period last year. 
  • AFFO was $35.6 million, an increase of 17.15% from $30.4m in Q2, 2019.
  • AFFO per unit was $0.20, up approximately 13% from $0.18 in Q2 of 2019. 

Showing the progress of the company’s financials over the past 36 months: 

YearRevenueWeighted Av. Shares OutstandingAFFO Per Unit% Growth in AFFO Per Unit
TTM (most Recent)$368.6m163m$0.823-0.36%


Looking forward the company has 11 development projects in the pipeline, with all of them expected to be completed between the end of 2020-2023 and providing NorthWest with anticipated net operating income of $20.4m. 

Because it is a REIT, the company is quite levered with over $2 billion in debt on its balance sheet and a Net Debt-to-EBITDA multiple of 8.5x, which is pretty high but I do not think that it is concerning in this case because it has an interest coverage multiple of 2.99x. Comparing the company’s leverage to my analysis last week on StorageVault which is not a REIT but has similar operations – StorageVault came in with a Net Debt-to-EBITDA multiple of over 13x. So you can see how NorthWest would be favourable comparatively. 

Now looking at the dividend, it has remained the same for over 10-years at $0.066 per month and appears relatively sustainable, paying out ~100% of AFFO over the past twelve months, which might seem high, but this is pretty typical for a REIT. 

And just a quick valuation assessment, they are trading around 33x EV/AFFO which could be viewed as trading near or above fair value given its limited growth. 

Our Take:

To sum things up – NorthWest Healthcare Properties growth has been limited and trades near or above fair value. All while maintaining a sustainable dividend payout ratio and sustainable financial leverage on the balance sheet. 

Being in the healthcare segment with over ~55% of its assets leased to hospitals and other healthcare facilities leased under long-term, inflation indexed lease structures, removing any operating costs or CAPEX risk to the company – future income should be relatively stable. And I believe if you are looking for a decent place to store some of your capital and earn a nice yield, NorthWest Healthcare could be a good option.

KeyStone does not have NWH under coverage or as a recommendation. 



Current Price: $3.55

Market Cap: $63.91 Million

What does the company do?

RIWI is a global trend-tracking and prediction technology firm. The company’s patented, cloud-based software solutions provide a global digital intelligence platform to clients seeking real-time consumer and citizen sentiment data anywhere in the world in order to improve business performance, evaluate program effectiveness, enhance customer engagement, and to monitor and reduce emerging threats and violent conflict.

Financial Performance:

  • RIWI’s Q2 2020 revenues were $2.32 million for the six months ended June 30, 2020, an increase of 53% compared to revenues of $1.51 million during the same period in 2019. 
  • RIWI had net income of $615,582 or $0.034 per share during the six months ended June 30, 2020, an increase of 617% compared to net income of $85,848 during the same period in 2019.

Balance Sheet: 

RIWI has a solid net cash balance sheet for a business of its size. The company ended the quarter with cash and equivalents of $3.7 million and virtually no debt.


While revenue growth is strong, RIWI remains with a small revenue base at ~$4 million on a trailing 12-month basis. The company has a P/E (TTM) of 33.06, Adj. P/EBITDA (TTM) of 36.07, and an Adj. EV/EBITDA (TTM) of 33.49. On each of these multiples RIWI trades at a significant premium to the market. We like the business, the balance sheet, and the growth prospects, but the valuations capture the current upside. 

Management’s goal is to push annual revenues from the current $4 million range to $30 million by 2024. If achieved, with a growing recurring revenue base, RIWI has upside. We like the management teams responsible, profitable growth and solid balance sheet approach, but the premium valuations have us just monitoring the stock at present.

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