ACI

Albertsons Companies Inc - Ordinary Shares - Class A

Consumer


Presented:03/30/2022
Price:$33.51
Cap:$16.19B
Current Price:$18.45
Cap:$10.69B

Presented

Date03/30/2022
Price$33.51
Market Cap$16.19B
Ent Value$33.51B
P/E Ratio19.51x
Book Value$4.94
Div Yield1.31%
Shares O/S483.12M
Ave Daily Vol2,294,952
Short Int4.41%

Current

Price$18.45
Market Cap$10.69B
Albertsons Cos., Inc. engages in the operation of food and drug retail stores. It offers grocery products, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services. The company was founded by Joe Albertson on July 21, 1939 and is headquartered in Boise, ID.

Publicly traded companies mentioned herein: Albertsons Cos Inc (ACI), Costco Wholesale Corp (COST), DoorDash Inc (DASH), Walmart Inc (WMT)

Highlights

The presenter is bearish on the grocery/CPG space and is short shares of Albertsons Cos Inc (ACI), one of the highest priced grocery store chains which has been massively over-earning since the start of COVID. As of the most recently reported quarter (Q3’21), on a two-year stack YTD ACI has CAGR’d comp sales 16.1%, adjusted EBITDA 26.5%, and net income 70.9%. The stock is trading at 12x earnings and 5.5x EBITDA on these inflated figures, but the presenter’s view is that ACI will stop over-earning and he considers the stock overvalued. There is also a technical overhang following its June 2020 IPO as the majority of the company is owned by its group of sponsors that have yet to sell. Given these headwinds, he sees 50% downside from the current low-$30 share price. 

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Idea Discussion

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