Shares of Kroger Co. (NYSE:KR) have been on watch all week. It is interesting to see the coverage. I covered it a week ago and since then there have been over a dozen opinion pieces put out. When I first started covering the name It began with a buy rating on the name $30. We made a trade in this name well over a year ago when it was called “a dream stock.” At the time it had everything going for it, but then of late has succumbed to the pressures facing all grocers: stiff competition, tight margins and growth. Now, I still think the company is one of the best grocery stocks to own. However, the sector has been totally obliterated, mostly in part to fears over the Amazon (NASDAQ:AMZN) purchase of Whole Foods (NASDAQ:WFM), as well as general weakness in all of retail. The reality is the market is overreacting. We all agree on this. However, there are some issues with this once champion of the sector that has nothing to do with Amazon. It fell on hard times in 2016 and its carrying over here in 2017. While I think it will return to its winning ways because the company continues to grow organically and through acquisitions, the company has cut guidance following its Q1 report. That hit the name hard last week. However, management has stepped in to help defend shareholders.
Before discussing what took place today let me just say that Kroger’s performance has been very respectable but the uncertain nature of the sector has crushed it. Therefore, the stock of Kroger and so many others have suffered at the iron fist of Amazon. After the massacre, the name trades around 11 times earnings. That is cheap. When we look………READ MORE