Albertsons Companies Inc - Class A

Albertsons was a detractor in the quarter. While current comparable store sales are a percentage point or so below where they should and could be, the company still has more levers to pull to improve FCF per share at this very defensive business. The market focused more on how close peer Kroger reported mildly disappointing results, and the competitive environment remains intense with Walmart executing well and Aldi committing to more growth. We also recognize that a boring company like Albertsons is the opposite of what the stock market wants at a time like this.

Albertsons is mentioned as a newer holding that is off to a good start on the People angle, indicating positive engagement and potential for growth. However, there is no explicit bullish or bearish argument made regarding its future performance or valuation.

We wrote about supermarket operator Albertsons earlier this year as a contributor in tougher stock market times. We took some off the table then but added back to our position in the third quarter on weakness. The stock was down on a quarterly earnings report that did not excite the market but was within our expectations. We were further pleased to see meaningful share repurchase at a high single digit annualized pace of shares outstanding. This remains a competitive industry, but it is also a steadily necessary one in which Albertsons has a strong position thanks to its great real estate, brand recognition and owner alignment.

Albertsons is a defensive yet growing company that is now free from the uncertainty of a failed merger with Kroger, allowing it to focus on growth. The company offers strong returns on capital, supported by a valuable real estate safety net, with 39% of its stores owned. The stable market position and potential for asset sales create upside that is not reflected in the current share price, which is closer to a value of $30. The recent quarterly earnings report met expectations, and the company has been actively repurchasing shares, further enhancing value per share.

Albertsons was a contributor for the quarter and is viewed as a stable business that remains undervalued due to its recent obscurity following a failed deal process with Kroger. The company is expected to grow at a moderate pace and possesses significant financial resources to repurchase shares. Additionally, Albertsons has multiple strategic options available, such as unlocking its real estate value and/or selling non-core markets, which could enhance shareholder value.

Albertsons was a contributor for the quarter and is viewed as a stable business that remains undervalued due to its recent obscurity following a failed deal process with Kroger. The company is expected to grow at a moderate pace and possesses significant financial resources to repurchase shares. Additionally, Albertsons has multiple strategic options available, such as unlocking its real estate value and/or selling non-core markets, which could enhance shareholder value.

Albertsons was a contributor for the quarter and is viewed as a stable business that remains undervalued due to its recent obscurity following a failed deal process with Kroger. The company is expected to grow at a moderate pace and possesses significant financial resources to repurchase shares. Additionally, Albertsons has multiple strategic options available, such as unlocking its real estate value and/or selling non-core markets, to enhance shareholder value.

Albertsons was a contributor for the quarter and is viewed as a stable business that remains undervalued due to its recent obscurity during a failed deal process with Kroger. The company is expected to grow at a moderate pace and possesses significant financial resources to repurchase shares. Additionally, Albertsons has multiple strategic options available, such as unlocking its real estate value and/or selling non-core markets, to enhance shareholder value.