Shares of Kroger Co. (NYSE:KR) are on my radar today. I was briefly in this name a year ago when I called this “a dream stock.” It had everything going for it, but then temporarily succumbed to the pressures facing all grocers: stiff competition, tight margins and growth. Well, guess what? I think the company has made the right moves to regain its footing as a growth machine and as one of the best grocery stocks to own. While this champion fell on hard times in 2016, I think it will return to its winning ways. The company continues to grow organically and through acquisitions, most recently picking up Murray’s Cheese. Shares pulled back a lot in 2016, even breaking under $30. The stock’s troubles have continued, but if you can get shares under $30, that would be a major bargain. While the sell-off may seem painful, the reality is that Kroger’s growth continues.
Its performance has been very respectable but it operates in a difficult sector and the future is uncertain. Therefore, the stock, which is an indicator for future expectations, has suffered. That said, the stock is not one that is vastly overvalued on a P/E basis and priced nominally. It trades around 15 times earnings. When we look to the just reported Q4 earnings, we see that the name was rather strong, but is suffering from stagflation and, in some cases, deflation. This will continue to spook investors. I will cover…..READ MORE