Safeway, Inc. (NYSE:SWY)

With continued pressure from government policies to reduce labor inflation we may see more people getting their sustenance from non-grocery channels. The idea being that McDonald's and what not can keep their prices low by paying their employees less while chains like Safeway will be hurt by rising food costs. There is also a small but growing trend for locally sourced food, a trend that Safeway is at an extreme disadvantage at exploiting.

I like the usave thing they have.

This company has no growth plans in the pipeline for 2012 and therefore I believe their growth will be flat.

valuation play, strong balance sheet nice dividend

As much as I love to shop at Safeway, the market is getting increasingly competitive. Walmarts/Targets are starting to branch into groceries and other food stuffs, as well as the already existing Costco market. Why pay $2.00/lb for nectarines when I can get a box full of nectarines at costco for $8.99? I love Safeway and I hope they can pull through, but I don't see a very fruitful and prosperous future with them.

solid dividend

Cash-cow, consumer staples, decent cash flow, OK debt for the industry, pays dividends, isn't going anywhere if the economy turns to garbage again.

As the irrational promotion environment ceases and food price inflation resumes margins should revert back to more average levels. Blackhawk is also providing material support to the operating profits as well. I believe that this should trade at $31 per share.

I also believe that management has done a poor job of managing ROIC. If this metric begins to improve, I believe SWY could trade materially above $31.

Always seems to have better prices than Lucky and with less gimmicks (cookware points?).. Stuck with it's club card program to gather advertising information with every purchase. Seems to have a different variety of offerings vs demographic and that means someone is actually paying attention to (grocery) market trends.

nearly all the stores now have the "lifestyle" facelift, and the grocers in general will see much higher customer traffic as the unemployment rate begins to drop. SWY has a growing gift card business and sub-market valuation. A nice stable performer that should hit the upper 20s in the next 3 years.

Stock just got beaten up with latest report. Will now move towards highs over next several months.

solid company

I'm hungry.

This met a high level screen to indicate a buy and strong outperform against its peers (other tickers in its industry). My 1st version of this spreadsheet devles deep into the company's balnace sheet and recent income statements, combined with other relevant price data for the company including insider/institutional holdings, short interest, debt levels, etc.
Testing capabilities of this 1st version of my automated, valuation spreadhseet matched with my personal criteria and see how it holds up.

Undervalued, solid management

Defensive play going into Q409 and 2010. S&P is up quite a bit, Safeway is down, plus it pays a dividend.

people gotta eat food Safeway has lots of locations with food. Projecting 50% gain in two year

They've still got good position in the industry, even though they're slowly being pushed out. Hold for no more than 1-2 years

They dropped a bunch on weak earnings. But we already knew that was coming as a result of the economy. The company is probably not going anywhere, so it'll rebound.