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Strategies & Market Trends : Value Investing
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To: E_K_S who wrote (24573)10/10/2006 9:48:31 AM
From: E_K_S   of 78673
 
SVU (Supervalue) reports 2Q profits jumped from $34 million to over $132 million or $0.61 per share, topping the Reuters estimate of $0.53, as net revenues of $10.7 billion came in just above expectations due to Albertson's Acquisition. Stock up more than 6 percent.

biz.yahoo.com
From the article"...Supervalu Inc., the nation's third biggest supermarket chain operator, reported on Tuesday that earnings nearly quadrupled in its second quarter, when it included the results of its newly purchased Albertson's grocery stores. It also boosted its guidance for the year...."

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I have hedged a few shares to lock in a profit for next year by selling the April $35 calls. I will continue to hold a small core position as SVU completes their store integration specifically w/ their regional distribution systems. SVU is know for running a very efficient distribution business. Some experts says the best in the industry (even better than Wall Mart). Management said that they will use their excess cash flow to pay down debt. Maybe they will also consider a raise in their dividend too.

Stock still selling at a value price. PE is now around 13. Watch Yucaipa to see if they start selling shares. His private equity firm purchased $680 million shares of SVU stock around August 2005. (http://biz.yahoo.com/ap/060810/supervalu_yucaipa.html?.v=1 )

EKS
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