Loblaw Is Still Worth Holding

Article Excerpt

LOBLAW COMPANIES $56 (Toronto symbol L; SI Rating: Above average) has moved down from around $70 in September, mainly due to fears that problems with its current restructuring will cut its profit growth in the final quarter of 2005 and the first half of 2006. Loblaw is trying to streamline its distribution operations, but these changes have led to stock shortages at some of its stores. The company is also integrating more general merchandise into its stores, and expanding its private-label business. These moves should help Loblaw cut costs and compete more effectively against Wal-Mart and other discounters. But the stock will probably stay in a narrow range until its earnings start to grow again. Loblaw is now a hold for safety-conscious investors. investors…