Lets take a look at the wholesale grocery landscape and ask a few reasonable questions. And of course make some assumptions based only on opinion.
C&S Wholesale Grocers, the undisputed king of wrapping everyone and everything up in paperwork. Loans, leans, personal signatures, non-competes and so on and so on has a group of top tier executives leave C&S Wholesale Grocers and no one is restricted in any manner. Not only are these former high level C&S executives working for Supervalu but they are actually running and visually controlling Supervalu and its corporate direction.
“Supervalu Stock & Its Market Cap Are A Virtual Bouncing Ball”
When we look into Supervalu stock prices and their derivative options and they are a virtual bouncing ball. Shorted well below the $5 level now prohibiting most mutual funds to purchase equities. In other words this stock has been shorted below where mutual funds are allowed by bylaws to purchase public stock.
Supervalu appears to be a stock that is acting out of sorts to say the least. Without many of the larger investment groups Supervalu and its stock prices will likely remain well below a fair market value.
How could the nations second largest grocery wholesaler have a market cap of less than one billion dollars. Lets make some comparisons and assume that C&S Wholesale Grocers and Supervalu have some comparable value. If that assumption of value is even close or within a billion dollars of one another then how can Rick Cohen and C&S Wholesale Grocers be worth anywhere near the Forbes estimate of over 10 billion dollars.
Simply put, either the Stockholder/C&S Wholesale Grocers estimate of value by Forbes is grossly inaccurate or Supervalu is worth well more than one billion dollars in market cap. The market cap number was based on todays market close….4/6/2017
Are we to believe Forbes estimate of value for C&S Wholesale Grocers and its sole shareholder could be off eight or nine billion dollars?
“Has Supervalu Been Set Up For A Cheap Sale…The Buy Of A Lifetime…Like No Other Purchase Since The Fleming Wholesale Grocery Deal”
A deal that incorporated the same group of executives from the same industry dismantleing a grocery wholesale giant?
The one thing we can all be certain of is something is going on behind the scenes. There are a very small group of grocery executives that understand and likely are directing what could be the buy of a lifetime if Supervalu is ultimately sold.
For the market cap of this wholesale giant to be below one billion dollars with Mark Gross at the helm one has to refer to the old saying…”Does This Pass The Sniff Test”
If I were to guess I would say 2017 will be an interesting year in wholesale grocery. Let me just say this….if you think this looks “OK” lets dig a little deeper.