Supervalu Inc.  (SVU) Trade Now »     Rate SVU  -  Discuss SVU  -  Add to Watch List        

Thanks to a UBS downgrade, SUPERVALU (SVU) took a 10% hit this past week, and in the process made new 52-week and five-year lows, before bouncing back more than 3%, aided by the buying help of bargain hunters and short covering. UBS trimmed its 2009 earnings estimates about 14%, from $3.00 to 2.60 and slashed its one year price target at twice the rate of its earnings cut, from $36 to $26. When it rains, it pours. To add insult to injury this occurred just after Jefferies and Company's coverage initiation last week, with an under perform rating. I expect sooner than later both these analyst

Today's Stock Focus is on Supervalu Inc. (SVU). According to Yahoo Finance, SVU "operates as a grocery retailer in the United States. The company operates combination stores, food stores, and limited assortment food stores. Its stores offer various grocery products, general merchandise, health and beauty care products, pharmacy products, fuel, and other items and services." According to Mergent's, SVU has increased it's dividend 35 consecutive years in a row.
The above table illustrates the perspective that I have on Supervalu Inc. (SVU) as compared to the other Dividend Achievers that ar

The grocery segment melted down on Friday. The catalyst was Great Atlantic and Pacific Tea Co, (GAP) missing  earnings estimates and seeing its share price plummet 26%. The entire sector sold off in sympathy, with SuperValu (SVU) giving up 11%, Safeway (SWY) and Kroger (KR) dropping 4% and Winn Dixie (WINN) slammed 8%, I think it was another overreaction, and on Monday, cooler heads will  prevail, bringing in bargain hunters to prowl on the sector.

 

Filed under: Industry, Wal-Mart (WMT), Market matters, Safeway Inc (SWY), Costco Wholesale (COST), Stocks to Buy, Cramer on BloggingStocks

My latest column is up at RealMoney.

Given that the grocery industry is typically classified as noncyclical, nondiscretionary and defensive, Supervalu’s (SVU) stock chart looks pretty scary. After reaching a high of more than $47 a share last year, the stock drifted down along with other grocers, then plummeted in late December and early January after it lowered its fiscal 2008 (which ended in February) earnings to a range of $2.91 to $2.97 a share before one-time acquisition-related costs. The original forecast was for $2.93 to $3.03 a share. The stock ultimately hit $26 in March.

When you c

Barron's can't understand why shares of SuperValu (SVU) have lost a third of their value since July 2007, considering the number-three U.S. supermarket chain topped FQ4 consensus estimates and continues to forecast a 13-15% EPS gain over a year ago.<!---->

• At a current $33, shares trade for just 10.5x earnings. They're also well below their normal enterprise-value-to-Ebitda multiple of 5.5%.