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

To: Dan Meleney who wrote (42277)	4/14/2011 7:00:14 PM
From: Kapusta Kid	Respond to of 78817

I like the cash flows, which more than doubled from FY09 to FY10. I assume Albertson's was at least partly responsible for some of that increase. Even with today's big gain, SVU sells for just 3x FCF. My concern, though, is with another of my cash flow metrics: FCF/Total Debt. I come up with 5.9% (5.6% ttm), which is quite anemic considering the magnitude of the debt load. SWY, e.g, shows FCF/TDebt = 10%, although it sells for @10x FCF. The numbers aren't available yet on M* or AdvFN for FY11, but from a Zacks article posted today, Cash from Operations for SVU is down YOY and a quick calculation reveals that, despite a decline in CapEx, so is FCF. I was looking for another tick up before I took a position, so I'm disappointed. If management makes this work, this is a 3- or 4-bagger.