Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, grocery store operator SUPERVALU (NYSE: SVU) has earned a respected four-star ranking.

With that in mind, let's take a closer look at SUPERVALU's business and see what CAPS investors are saying about the stock right now.


Headquarters (Founded) Eden Prairie, Minn. (1871)
Market Cap $1.67 billion
Industry Grocery stores
Trailing-12-Month Revenue $38.08 billion

CEO Craig Herkert (since 2009)

CFO Sherry Smith (since 2010)

Return on Capital (Average, Past 3 Years) 6.9%
Cash/Debt $186 million / $7.68 billion
Dividend Yield 4.5%

Kroger (NYSE: KR)

Safeway (NYSE: SWY)

Wal-Mart (NYSE: WMT)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 93% of the 639 members who have rated SUPERVALU believe the stock will outperform the S&P 500 going forward. These bulls include jahjimhall and dustinnoe.

A couple of months ago, jahjimhall helped bring SUPERVALU's improving prospects to our community's attention:

Good gamble on a turnaround play. Good progress on debt reduction. ... I think the new CEO Craig Herkert, (formerly CEO for the Americas at Wal-Mart) has the creds to do the job.

Currently, SUPERVALU even sports a paltry forward P/E of 6.6. That represents a clear discount to competitors Kroger (11.2), Safeway (11.8), and Wal-Mart (10.7).

CAPS member dustinnoe elaborates on the bargain opportunity:

[SUPERVALU] has a ton of debt and Mr. Market is worried about it, but a close look reveals that the debt load is manageable. In fact, if management focuses on reducing debt, and I think they will, the company can easily be debt free in about ten years, and at comparable industry levels way earlier. As far as the recession goes, consumers can only cut back spending on food to a certain point (everyone has to eat) so I don't expect to see revenues drop much more.

Since the acquisition of Albertson's, management has been on a mission to centralize operations which should reduce expenses and boost margins. Throw in a new CEO coming from Wal-Mart (think streamlining) and there's a good recipe for a turn around. ...

I expect Mr. Market will correct the price of [SUPERVALU] within 3-5 years, until then owners can enjoy a 4.4% dividend.

What do you think about SUPERVALU, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool Options has recommended buying calls on SUPERVALU. Wal-Mart is an Inside Value and Global Gains pick, and Motley Fool Options has recommended a diagonal call position on it. The Fool owns shares of SUPERVALU and Wal-Mart. Try any of our Foolish newsletter services free for 30 days.

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