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Target & Kroger Are 2 Stocks You Don't Want to Ignore

These are our articles posted on Seeking Alpha. Click "READ MORE" if you would like to read the rest of the articles.

Ignoring Target Now Could Haunt You In The Future

Summary

  • Target has managed to add more stores without compromising on average sales per sq. ft.
  • Target's increasing focus on smaller ‘customized’ stores will have significant positive consequences for the company.
  • Target has been successful in increasing REDcard penetration regularly. This is likely to continue.
  • Target has an intrinsic value close to $89.

Target has made a nice recovery from its woes in the past.

Target (NYSE:TGT) enjoyed a successful fiscal 2015 as it saw healthy traffic throughout the year. Despite the growth in EPS and the top-line, Target's stock hasn't set the world on fire in the last 12 months. Share price is down 4.55%. While in absolute terms, this looks rather depressing, a more encouraging picture emerges if we compare Target's stock performance with that of its industry peers, Wal-Mart (NYSE:WMT) and Sears Holdings Corporation (NASDAQ:SHLD). Both WMT and SHLD have experienced a greater decline in price in the same period... READ MORE



Kroger Could Reach $45 In 12 Months

Summary

  • Kroger’s initiatives have helped the company deliver solid identical supermarket sales growth in the last 12 years.
  • Kroger’s domestic penetration is around 24% and growing.
  • It is incredible that Kroger has managed to constantly expand its FCF despite the growth in capital expenditures.
  • Kroger’s shares could reach $45 in the next twelve months.

Kroger (NYSE:KR) had a fantastic 2015 as the company achieved positive identical supermarket sales growth ex-fuel in each of its four quarters. The acquisition of Roundy's was certainly the highlight of the year for me, demonstrating the increasing aggressiveness of Kroger's M&A strategy. Kroger has started 2016 with the same spirit, investing in Lucky's Market to increase its organic products offerings. So as Kroger continues to venture into new markets to expand its customer base, should you trust the company's growth story and invest?

In Q4 2015, ID sales without fuel rose by 3.9% and this was Kroger's 49th consecutive quarter of positive identical supermarket sales growth. This is an incredible feat that rubberstamps the success of Kroger's initiatives concerning new products and store formats. As the chart below shows, since 2011, Kroger's same store sales increase ex-fuel has not gone below 3%... READ MORE

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