+ Watch SWY
on My Watchlist
The Company is a food and drug retailers in North America.
Screen: Under $10B, Top 10% EBIT/EV, Z Score >1.81
Safeway operates in the rural areas and small towns of America, Costco can not operate here, nor the larger Grocery Store Names that run on high volume - low margin business plans, or the newer high image organic boutiques like Whole Foods or Trader Joe's , 5 Towns with 4 to 10 thousand populations where the nearest Walmart is 20 to 30, 50 miles away. People can not spend 1/2 hour in time/gas to save 5% to 7% plus drive time is very important when buying high margin items like ice cream , frozen meals, beer and medications from the Safeway pharmacies', that are often the only place in small town America to get baby boomers prescription medication filled. Do you want your chicken or beef in your car trunk for the half hour to forty five minute drive from Walmart who can not operate in most of middle America. Walmart needs a town of at least 40,000. Too many on Wall St. and even us home gamers forget the fly-over area of the United States when it comes to grocery stores/ pharmacies'. This is Safeway's bread and butter. Small town USA where 2/3 plus of foods are consumed.
Low price/fcf of about 6. Solid business.
Buybacks and 5x fcf. Some debt.
safeway has had a lot of union problems which have plaqued them for many years but as the older workers retire and more and more are new contract workers the problems will become less and they will be able to compete better cost wise. they are closing and selling unprofitable stores and opening stores in more profitable markets also buying back shares on a regular basis all of which will benifit the in thew future steven kemp
STSC Top ten Dec 2012
Bad merchandising. Can't compete.
Safeway has been buying back shares for several years now. Two of it's competitors ( Savemart and Noble Hill ) have recently shown union representatives they are hurting and could go bankrupt. Safeway is now an advertising company it sells shelf space, end displays advertisement on carts and receipt tape. It sells Target gift cards. It buying up real-estate ( shopping centers). 2 SWY board memb work for KKR. Burd sits on Kohls board. With all the property it owns this company is worth at least 34 a share. Plus you get almost 4% for a dividend. Possible takeover target I think possible buyers could be TGT or Kohls.
Looking at $12/share within 6-9 months...
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.
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.
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
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ratings and Key Statistics provided by Zacks.
SEC Filings and Insider Transactions provided by Edgar Online.
Powered and implemented by Interactive Data Managed Solutions. Terms & Conditions