Investing in Boring Businesses
VLGEA is a boring business. It operates a chain of ShopRite groceries stores across PA, NJ, and MD. The company averages a modest 6% sales growth CAGR and has paid a dividend every year since its inception in 1965. I like investing in boring businesses. Stable, consistent returns on shareholder capital can have tremendous compounding effects.
VLGEA sits on a ton of cash, has stable, consistent free cash flows with an unlevered FCF 10Y CAGR of 29%. Although the company faces stiff competition in an industry that already deals with narrow margins, they have flexibility and potential to get to their intrinsic business value of around $31 - 36/share.
I wrote a blog piece about them where I go into more detail, give it a read here: rockvuecapital.wordpress.com/2018/02/07/a-super-market-flushed-with-cash/
From a technical standpoint, if the stock can hold at this current support level of 22.50 - 23, I would venture to initiate a starter position with a stop loss right below that support. Any price acceleration from the bottom I would add on to my position.
Please let me know if I missed anything, or if I have any blind spots in my analysis, it really helps!
Thanks,
Brandon
VLGEA sits on a ton of cash, has stable, consistent free cash flows with an unlevered FCF 10Y CAGR of 29%. Although the company faces stiff competition in an industry that already deals with narrow margins, they have flexibility and potential to get to their intrinsic business value of around $31 - 36/share.
I wrote a blog piece about them where I go into more detail, give it a read here: rockvuecapital.wordpress.com/2018/02/07/a-super-market-flushed-with-cash/
From a technical standpoint, if the stock can hold at this current support level of 22.50 - 23, I would venture to initiate a starter position with a stop loss right below that support. Any price acceleration from the bottom I would add on to my position.
Please let me know if I missed anything, or if I have any blind spots in my analysis, it really helps!
Thanks,
Brandon
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.