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

To: geoffrey Wren who wrote (46130)	1/7/2012 8:32:24 PM
From: E_K_S	Respond to of 78704

Safeway Inc. Common Stock (NYSE: SWY) - Graham No. $21.06 (Current price $21.23) SuperValu Inc. Common Stock (NYSE: SVU) - Graham No. $ 4.66 (Current Price $8.23) finance.yahoo.com One of the constraints for using the GN is that the BV <= 1.5 (you can go as high as 2 but it is not advised) and the PE <= 15. Some analysts say to use a five year average to arrive at better valuation number. I did not screen the previous list by these constraints and that is why there was such a large variation. Both SVU & SWY meet these constraints and their GN reflect this. SVU is a sleeper as I believe their earnings are at a trough level in the cycle and could go much higher. This stock continues to be one of my core holdings as it is selling near its BV of $7.07/share. They still continue to report positive earnings and do generate positive free cash flow that is used to pay down debt (from their earlier Albertsons acquisition) and pay a nice dividend (now yielding 4.2%). The hidden gem for SVU is their logistic division that is quite profitable. After a few years I have got my average cost down to $8.00/share. I am not too concerned that TGT will take sales away from SVU like many of the analysts had predicted but same store sales are not growing like in the past. It should be a slow and steady growth period in 2012 as management weeds out the non productive stores, sell assets, cut distribution costs and work on increasing revenues and earnings. At least that is the way I see it. I was considering WMT as a possible buy since this is one of Buffets holdings. After my review today, I will pass. I may consider WAG if it sell off significantly (ie below $25/share) but for now, SVU seems like a good hold candidate for me. EKS