Ding Ding!
It's official: After spending much of the past few years at nothing better than a four-star rank, SUPERVALU
With SUPERVALU swinging to a profit in its fiscal fourth quarter thanks to a large effort to reduce costs and drive future growth, some CAPS members see the grocer as a solid turnaround play. Its recent drop in share price, resulting in a mid-single-digit earnings multiple, has more investors thinking the stock is a super value, too.
But the road ahead certainly isn't clear for companies in the grocery sector. Heavy competition squeezed sales in Safeway's
But a general uptick in the economy could provide a boost for SUPERVALU. Recent earnings reports from other food retailers suggest that, while still tight, consumer spending on food is slowly on the mend. Wholesale retailer Costco
The changes SUPERVALU has been making have some CAPS members seeing potential. It's launching new stores and freeing up shelf space to make room for higher-margin private-label products. Some CAPS members also like the restructuring of its board of directors, aimed at bringing new ideas to the table.
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