Seeking Alpha

Kroger takes down other grocery store stocks

  • A disappointing pace of sales growth from Kroger (KR -1.9%) has fouled the mood on the grocery store sector a bit.
  • The company didn't raise its outlook for FY13 EPS as analysts had expected. A miss by the typically-steady Kroger has analysts resetting expectations for the group.
  • Decliners: Safeway (SWY) -3.3%, Delhaize Group (DEG) -1.2%, Ingles Markets (IMKTA) -2.4%, Sprouts Farmers Market (SFM) -1.4%, Whole Foods Market (WFM) -0.9%.
Comments (10)
  • moseharper
    , contributor
    Comments (280) | Send Message
     
    SFM and WFM's stock prices should not suffer from this disappointment from Kroger. Nothing has done well recently....
    5 Dec 2013, 05:36 PM Reply Like
  • DAG Investments
    , contributor
    Comments (3918) | Send Message
     
    just posted a new article with more complete analysis of and thesis for (KR) ... bottom line, the incredible growth numbers were only "disappointing" to chasers who shouldn't have been in a stock fro investors in the first place. "Kroger: The Earnings Dip Is A Buy Opportunity" http://seekingalpha.co...
    8 Dec 2013, 02:14 PM Reply Like
  • moseharper
    , contributor
    Comments (280) | Send Message
     
    Really. Isn't this true of all stocks? Analysts over-anticipate an earnings number, when it's a penny short, the stock tanks. Ridiculous. And aren't price dips always "buying opportunities"? Look, we all have to enter somewhere and few hear the bell ring when it's the time to do it.
    9 Dec 2013, 06:06 PM Reply Like
  • DAG Investments
    , contributor
    Comments (3918) | Send Message
     
    You're meaning is somewhat unclear ... what is the "this" you're referring to in your first sentence?

     

    I agree that the quarterly guesstimates and earnings game is silly for investors, as opposed to traders, but it's simply not true that an earnings miss means a stock "tanks". That's a vast oversimplification as there are countless examples of earnings misses that result in the stock skyrocketing ... because there's much more to it than just EPS, or just revenue, or just guidance, or just anything else.

     

    And, no, price dips are not always buying opportunities. To my mind, a buying opportunity is when a $45 stock goes to $40 before it goes back to $45, then on to $50 ... that does not mean a stock that was $45 and goes to $40 on its way to $20 was a buying opportunity at $40.

     

    I'm not sure what your quarrel is with my post or my analysis of Kroger, if you've read it, but with all due respect, if all stocks are the same, why invest at all?
    9 Dec 2013, 06:41 PM Reply Like
  • moseharper
    , contributor
    Comments (280) | Send Message
     
    The "this" is the market over-reaction to earnings when, although in line with the company's expectations and are perfectly in-line with the progress one would expect, fall a penny or two short. The "this" is that silly realization by investors that "I better get out- they missed analysts expectations!" mentality. I have no quarrel with your post and analysis, but your "buying opportunity" definition only works if you have a magic seeing eye to look into the future. Otherwise, you're like the rest of us. And why invest? Beats staring at a pile of currency. Do your analysis, read posts like yours and make your decisions.
    10 Dec 2013, 05:33 PM Reply Like
  • DAG Investments
    , contributor
    Comments (3918) | Send Message
     
    I agree with almost everything you said there. This is the one exception ...

     

    It is entirely false that my "buying opportunity" definition only works if one has a "magic seeing eye to look into the future". That's basically saying investing is the same as gambling and, with all due respect, that's absolutely ridiculous. It may seem that way to people who don't know how to do it properly, but that does not mean their tainted perceptions define the reality. I consider it absolutely and undeniably impossible for me to swim across the Atlantic Ocean, but that does not mean it is impossible for the woman who did it.

     

    So, my "buying opportunity" definition works for anyone who understands that every stock's movement direction, as well as both the extent and velocity thereof, directly result from the underlying company's performance trends; and that those trends can be found in the data that is readily available to anyone willing to put forth the effort. So, it is always at least somewhat predictable, and often entirely predictable, whether any stock's price will go up or down.
    11 Dec 2013, 02:29 PM Reply Like
  • moseharper
    , contributor
    Comments (280) | Send Message
     
    "To my mind, a buying opportunity is when a $45 stock goes to $40 before it goes back to $45, then on to $50"
    This is surely the definition of buying opportunity, but the "then on to $50" part is what necessitates the crystal ball. Mine's broke, and sometimes, things just happen that aren't foreseen- that defeats the buying opportunity definition.
    12 Dec 2013, 01:30 PM Reply Like
  • DAG Investments
    , contributor
    Comments (3918) | Send Message
     
    It necessitates nothing more than effort and know how so we'll have to agree to disagree as my analysis and valuation models work swimmingly for me and I'm sure your dice rolls work well enough for you, which is all that matters. Best.
    12 Dec 2013, 03:06 PM Reply Like
  • moseharper
    , contributor
    Comments (280) | Send Message
     
    And I'm sure your analysis is always 100% correct.
    13 Dec 2013, 05:40 PM Reply Like
  • DAG Investments
    , contributor
    Comments (3918) | Send Message
     
    Brilliant rationale. If you get cancer someday, you are absolutely right that you should never seek treatment since it is not 100% effective. Best of luck with that level of thinking.
    13 Dec 2013, 06:32 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs