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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Kapusta Kid who wrote (39770)	10/22/2010 12:02:34 AM
From: Spekulatius	Read Replies (2) \| Respond to of 78750

re SVU - if you adjust for the leverage, the valuation is about on par with KR. SVU EBITDA/EV will be about 5x (KE ~5.5) and EV/sales ~0.26 for both. Due to the high leverage SVU equity can make wide swings in either direction. I think SVU starts to look cheap due to it's option value. They have currently 6.7B$ in debt and only 2.25B$ in market cap, so it's reasonable to talk about an equity sliver here. We have Albertson stores in our neighbourhood but rarely go there. Their pricing is not attractive overall and the good promotions they have every once in a while are not enough for us to give them mindshare. Still I think the equity does look attractive here from a risk reward perspective. I think I might give this one a shot.