Value Investing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

From: leboeuf	2/16/2011 5:54:05 PM
	Read Replies (3) of 78748

First post for me here. On SVU: obviously debt is high, but it seems it should be manageable for the next few years. I would though add pensions as an additional liability as it was underfunded by $762M in the last 10K. They also need to contribute to "multi-employer" pension plans, which seem to be off the books (and also underfunded), so pensions are a big obligation (though not short-term) relative to market cap and even EV. Operationally, same store comps are terrible and seem very low for a product as basic as food. Seems like at one point, high negative comps would have to stop. That being said, SVU gave a gross margin of 27% in the retail segment, which should be even higher for the traditional business (excluding Save-a-lot). SWY has margins of 28-29%, while KR 22-23%. SWY remodelled its store base so it might be better placed to charge higher prices. I am thinking KR might be the more appropriate comparable. With an EBIT margin of around 3-4% at SVU, how does SVU keep cutting prices to match the competition? Any thoughts on this?

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next