Casey General Stores Deserves A Salute

| About: Casey's General (CASY)

In a market where most stocks are tanking Casey General Stores (NASDAQ:CASY) just might deserve a salute for its upward momentum. Not only is it up more than the market but it's also doing better than most of the other food stores too. The stock has been up 8.24% in the last month and shows steady rises in price as evidenced by this hourly trading chart over the last month provided by Barchart:

Click to enlarge charts

In the past six months while the market as measured by the Value Line Index is up 7% Casey was up 12%:

Casey’s General Stores, Inc., together with its subsidiaries, operates convenience stores under the Casey’s General Store, HandiMart and Just Diesel names in 11 Midwestern states, primarily Iowa, Missouri and Illinois. Its stores offer foods, beverages, dairy and bakery products, sandwiches, fountain drinks, donuts, cookies, brownies, Danish rolls, ham and cheese sandwiches, pork and chicken fritters, sausage sandwiches, chicken tenders, popcorn chicken, breakfast croissants and biscuits, breakfast pizza, hash browns, quarter-pound hamburgers and cheeseburgers, and potato cheese bites. The company’'s stores also provide non-food items, which include tobacco products, health and beauty aids, school supplies, house wares, pet supplies, photo supplies and automotive products. In addition, it offers gasoline or gasohol for sale on a self-service basis. As of January 31, 2012, it owned and operated 1,686 stores in 11 states. The company was founded in 1959 and is headquartered in Ankeny, Iowa. (Yahoo Finance profile)

Factors to consider:

Barchart technical indicators:

  • 100% Barchart technical buy signal
  • Trend Spotter buy signal
  • Above its 20, 50 and 100 day moving averages
  • 10 new highs and up 8.24% in the last month
  • Relative Strength Index 68.29%
  • Barchart computes a technical support level at 55.73
  • Recently traded at 58.99 with a 50 day moving average of 54.49

Fundamental factors:

  • Although a regional stock the issue is followed by analysts from six Wall Street brokerage firms
  • Analysts predict revenue will increase by 25.10% this year and another 11.90% next year
  • Earnings are estimated to grow by 20.10% this year and additional 14.50% next year and to continue to grow annual by a rate of 10.45% for the next five years
  • The consensus numbers result in three strong buy and three hold recommendations to clients
  • The 18.78 P/E ratio is not too bad for a double digit growth stock when compared to the 15.80 P/E ratio of the market
  • The dividend rate of 1.05% is only 20% of estimated earnings but is lower than the market's dividend rate of 2.20%
  • The company has a B+ financial strength rating
  • The main products are gas, pizza, hamburgers, donuts and beer - what more could you want?

General investor interest:

  • This is a regional stock and so far only 127 readers of Motley Fool are monitoring this issue
  • Of those expressing an opinion 89% think it will beat the market
  • The more savvy All Stars voted 90% for the same result
  • Among the firms positive on the stock are Barclays and Morgan Keegan

If you feel like I do I always let the market have the final vote and with Whole Foods Markets (NASDAQ:WFM) up 39% in the last year, Sysco (NYSE:SYY) down 10% and even Kroger (NYSE:KR) down 7%, I'm impressed that CASY is up 49% for the same period:

Summary: Casey General Stores has analysts forecasts of double digit growth in both sales and earnings and a P/E just slightly higher than the market's. Even with these good growth prospects I'd still look at this as a speculative issue because it is a regional stock. Protect profits with moving stop losses and monitor the 50 day moving averages and the lower 14 day turtle channel using a chart like to one below:

Disclosure: I am long WFM.