SVU (Update)

SUPERVALU INC.

Consumer


Presented:03/20/2013
Price:$4.15
Cap:$0.89B
Current Price:$32.49
Cap:$1.26B

Presented

Date03/20/2013
Price$4.15
Market Cap$0.89B
Ent Value$7.45B
P/E Ratio14.93x
Book ValueN/A
Div YieldN/A
Shares O/S213.46M
Ave Daily Vol7,140,000
Short Int36.00%

Current

Price$32.49
Market Cap$1.26B
SUPERVALU INC., together with its subsidiaries, operates as a wholesale distributor to independent retail customers in the United States. It operates in three segments: Retail Food, Save-A-Lot, and Independent Business. The Retail Food segment operates retail stores that provide groceries and various additional products, including general merchandise, health and beauty care, and pharmacy under the Cub Foods, Farm Fresh, Hornbacher’s, Shop ’n Save, and Shoppers Food & Pharmacy banners. This segment operates a total of 191 stores, including 44 Cub Foods stores primarily in the Minneapolis/St. Paul market; 43 Farm Fresh stores in the Virginia Beach, Virginia market; 6 Hornbacher’s stores in the Fargo, North Dakota market; 42 Shop ‘n Save stores in the St. Louis market; and 56 Shoppers Food & Pharmacy stores in the Washington D.C. and Baltimore market. The Save-A-Lot segment owns and operates 381 Save-A-Lot grocery stores and licenses an additional 950 stores to independent operators. The Independent Business segment provides wholesale distribution of products to independent retail customers comprising single and multiple grocery store independent operators, regional and national chains, mass merchants, and the military. It offers a range of brand name and private-label products, including perishable and nonperishable grocery products, general merchandise, health and beauty care products, and pharmacy products. The company was founded in 1871 and is headquartered in Eden Prairie, Minnesota.

This presentation is an update from one of the two clients who have previously discussed SVU.

Highlights

The presenter owns SVU equity and is not presently long any SVU credit instruments; however, his position and opinion stem from extensive research on the company’s credit instruments and recent restructuring via Cerberus. He believes the equity is the best way to gain from SVU focusing its efforts on running both its higher multiple Save-A-Lot stores and banners like Cub Foods and Shop ‘n Save which are competitive on pricing. 

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