SVU
SUPERVALU INC.
Consumer
05/30/2014
Presented
| Date | 05/28/2014 |
| Price | $7.45 |
| Market Cap | $1.94B |
| Ent Value | $4.63B |
| P/E Ratio | 15.24x |
| Book Value | N/A |
| Div Yield | N/A |
| Shares O/S | 260.20M |
| Ave Daily Vol | 4,080,000 |
| Short Int | 9.30% |
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. |
Publicly traded companies mentioned herein: The Kroger Co. (KR), Safeway Inc. (SWY), SUPERVALU (SVU), Wal-Mart Stores Inc. (NYSE:WMT)
Highlights
The presenter is short shares of “forever broken” grocery retailer Supervalu (SVU), and believes the recent run up in its share price to $7.60 creates an attractive risk/ reward for bears. The company is largely profiting off of its Transition Services Agreements (TSA), as overall sales are not growing as well as many had hoped. While CEO Sam Duncan is “very smart” and has an excellent reputation as a cost-cutter, SVU’s problems stem from a lack of competitiveness on pricing and “no proper explanation for a path to grow.”
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