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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (37950)	5/26/2010 10:25:06 AM
From: E_K_S	Read Replies (3) of 78464

Hi Paul - RE: SUPERVALU Inc. (SVU) Been thinking about adding to my position. I like the defensive nature of the grocery business. Reviewing their balance sheet, SVU's debt is still very large (even after the sale of several stores). - The company is very profitable and now selling at 7 PE (1/2 the PE of competitors). Analysts have SVU earning $1.92/share for 2012. - EBITDA/Debt 3.41 (pretty large but I suppose manageable) - Operating margins at 3.14% pretty good and reflect their excellent warehouse & distribution network. I will maintain my position (Avg cost around $14.00/share) but will pass on adding new shares. I must stay w/ companies that have a low debt profile in the current environment. However, w/ their new CEO (recruited from Walmart - Craig Herkert CEO bought 25K shares at $14.75/share in Jan 2010), the sales of more stores and their excellent warehouse & distribution infrastructure, SVU seems to making positive progress. The stock is a good gainer today up almost 4%. EKS

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