Supervalu (Acme, Save-A-Lot), which operates more than 2,000 supermarkets in the U.S. including Albertsons, Jewel-Osco and Shaw’s, continues to generate press as a takeover target. Last week, Bloomberg said that Supervalu “is offering private equity shoppers the biggest discount of any supermarket chain in America.”
- The company is expected to turn a profit this year for the first time in three years and has the industry’s highest free cash flow yield (an overall return evaluation ratio of a stock). Bloomberg’s data shows that their free cash flow yield is more than 10 times higher than the median for U.S. food retailers with at least $100 million in value.
- After Supervalu stock fell to a 30-year low last week, its valuation was 3.9 times earnings before interest, taxes, depreciation and amortization. According to Bloomberg, that’s a third less than the industry median and about half the multiple for consumer staples companies in the S&P MidCap 400.