SuperValu‘s name and ticker symbol, SVU, are quite contradictory. One indicates a value manager’s dream–super value, a great investment–while the other is an acronym for the special victims unit–a value trap, a value investor’s nightmare. Which one is it? I believe it is the great investment. SuperValu is the fourth-biggest grocer in the U.S., if [...]
I often start my mornings with egg, cheese and turkey sandwich at Panera Bread. This morning was no different. While reading newspapers on my Kindle, sipping hazelnut coffee (I know I just lost respect of the true coffee drinkers), I started with yesterday’s FT, an article on China piqued my interest. China plays a very [...]
The following article was published in February 4th, 2008 issue of Barron’s. It is revised, updated partial excerpt from my book Active Value Investing: Making Money in Range-Bound Markets
When I bought Wal-Mart (WMT) a bit more than a year ago, I wrote an article for Financial Times where I laid out my theses: Wal-Mart currently appeals mostly to lower income demographics, and this is where things will change the most… Cleaner, better, more appropriately merchandised stores will attract new customers… encourage shoppers to… [...]
Herb Greenberg wrote a wonderful column and said something I’ve wanted to say for a long time, that blaming Bob Nardelli for the lackluster performance of Home Depot’s (HD) stock is just plain silly. Since Nardeli took over Home Depot in 2000, Home Depot’s earnings have grown at an amazing clip of 20% a year, revenues over 15%, net margins have increased [...]
My thesis for buying Wal-Mart (WMT) was very simple: once it improves its store appearance and merchandise, existing customers will spend more money and new customers will start spending new money on higher margin merchandise. Same store sales will go up and everybody will be happy (except competitors like Bed Bath and Beyond (BBY), Linens and Things (LIN), etc.). Then, international growth will keep the giant growing for years to come.
So far so wrong. Same store sales dipped into negative territory – not so good. International growth? Well, exiting Germany and South Korea was not part of my plan but it actually made sense, Wal-Mart could focus on the countries where it has a competitive advantage and labor laws are less… well, socialistic.
Walgreens (WAG) comments on Wal-Mart (WMT) “will put them out of business strategy” on the company conference call: For the 291 drugs that Wal-Mart will sell for $4, the average co-pay at Walgreens is $5.30 and for Medicare Part D patients it’s only $3.18. Wal-Mart’s program covers less than 300 generic medications while Walgreens pharmacies’ [...]
By Vitaliy Katsenelson November 17-18, 2005 – Minyanville.com Wal-Mart’s Double Standard I talked to two friends of mine, both are money managers. Their firms will not buy Wal-Mart (WMT) because they’re afraid clients will be upset with them. One of the firms is located in Boulder – so that unwillingness to own [...]