Smart Stock - SVU and GAP
Supervalu (SVU) and The Great Atlantic & Pacific Tea Company (GAP) are both major grocery chain operators trading near multi-year low yet have both received insider interest recently. At $11.17 per share, SVU is trading a a low P/E of 6.84 while GAP trading at $3.78 is still struggling to make net income since 2008. Is it a good time to buy these stocks? Which one is a better choice? Let's take a detail look at the two.
The Great Atlantic & Pacific Tea Company is operating total of 429 stores throughout Northeastern United States with more than 50% of its stores in the tristate of New York, New Jersey and Pennsylvania. Among its chains are full service supermarkets of Pathmark with 144 stores, A&P with 110, Waldbaum's with 64 and Super Fresh with 69stores. Then there is the upscale gourmet stores of The Food Emporium with 23 stores. In addition it also targets low-price market with Food Basics which has 9 stores in the tristate.
Supervalu is a far bigger grocery stores operator with the 10 chains throughout the nation including ACME (125 stores), Albertsons (463), Bristol Farms (16), CUB (78), Farm Fresh(44), Hornbacher's(6), Jewel-Osco(182), Lucky(5), Save-A-Lot(1179), Shaw's and Star (194), Shop'n Save(41) and Shoppers(62).
As far as the store count Supervalu is the clear winner along with wider region coverage. Revenue wise Supervalue earns $11 billion in the latest quarter while GAP earns $8 billion for the entire year and while GAP is still struggling to make a profit, Supervalu has turned profit for the year ending February, 2010 brining in $393 million. In addition Supervalu is also able to provide a decent 3.5% dividend while GAP is still trying to sell stores to build up cash reserves.
Supervalu is a safer investment with great upside potential as the stock is still trading at multi-year low. GAP does has insider purchase recently but is a riskier investment. However with GAP's 400 stores, it could be a take-over target.
The Great Atlantic & Pacific Tea Company is operating total of 429 stores throughout Northeastern United States with more than 50% of its stores in the tristate of New York, New Jersey and Pennsylvania. Among its chains are full service supermarkets of Pathmark with 144 stores, A&P with 110, Waldbaum's with 64 and Super Fresh with 69stores. Then there is the upscale gourmet stores of The Food Emporium with 23 stores. In addition it also targets low-price market with Food Basics which has 9 stores in the tristate.
Supervalu is a far bigger grocery stores operator with the 10 chains throughout the nation including ACME (125 stores), Albertsons (463), Bristol Farms (16), CUB (78), Farm Fresh(44), Hornbacher's(6), Jewel-Osco(182), Lucky(5), Save-A-Lot(1179), Shaw's and Star (194), Shop'n Save(41) and Shoppers(62).
As far as the store count Supervalu is the clear winner along with wider region coverage. Revenue wise Supervalue earns $11 billion in the latest quarter while GAP earns $8 billion for the entire year and while GAP is still struggling to make a profit, Supervalu has turned profit for the year ending February, 2010 brining in $393 million. In addition Supervalu is also able to provide a decent 3.5% dividend while GAP is still trying to sell stores to build up cash reserves.
Supervalu is a safer investment with great upside potential as the stock is still trading at multi-year low. GAP does has insider purchase recently but is a riskier investment. However with GAP's 400 stores, it could be a take-over target.
posted by Stock Geek at
12:08 AM
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