Operating results continue to deterioriate...although not nearly as much as I had feared they would.
Still, the guidance seems like a bit of a pipe dream. I would more likely suspect they'll do $1 in EPS this year, instead of the range he gave.
The debt is too high. At their pay down rate, it would take tham 10 years to pay off their debt.
If they can actually GROW their EPS, as projected this year, the stock could go to $10-12. But if EPS shrink 15-20%, as I suspect, the stock could drop to $4-5.
Since I have little confidence, or basis to predict, the success of their current strategies (although I do like the way the CEO communicates), I'm putting it as a weak buy. (I do maintain a small position.)
But I will say this: if insider don't step in and start buying in the open market, that will be a significant measure of the confidence level they have that the company will earn $1.27-1.42 this year. Truly.
Insiders have been buying this company this year while industry wide insiders have been selling...do you even check the info available before you run your board"analysis" BV is zero? Your brain is a zero
In FY'12 Goodwill was written down from 1.984 billion to 847 million and Intangible Assets went from 1.17 billion to 809 million. Seriously doubt they'll have any additional Goodwill writedowns in FY'13. Seems like they tried to get as much of the writedowns out of the way as possible in FY'12. Look at how quickly they handled the 800 layoffs at the Corporate level that they announced and booked in Q4. Shorts were wrong on debt covenants being breached. They were also wrong on cash earnings dropping below one dollar per year. FY'13 will be the year the smart ones book the profit and cover. Once the increasing EPS is confirmed, we'll get the long awaited multiple expansion. We go up from here. Happy Shopping to you all....
I've been looking & thinking about SVU for a while now.
What really concerns me is the UNENDING stream of asset impairments & writedowns. When is it going to stop? Next quarter? I somehow doubt that...
I think it will all boil down to this...
The writedowns will stop when sales stop declining.
Book Value is a garbage metric for companies which are in existence for 30 years IMO.
SVU is sitting huge land assets in choice locations which already has been depreciated out of the balance sheet.
Such a seasoned investor like yourself should already know that.
I think you missed the boat and bashing to buy it cheaper.
"The debt is too high. At their pay down rate, it would take tham 10 years to pay off their debt."
This thinking is WRONG.
So GE needs to pay off ALL of its debt?
So KRoger needs to pay off ALL of its debt?
So Safeway needs to pay off ALL of its debt?
No. They don't
SVU credit rating will improve.
Debt continues to be repaid.
More money can be allocated to capital improvements.
Good luck to shorts.