BMO Capital Markets noted on Monday that the selling pressure on the stock has been particularly fierce of late as it's down more than 20% since March 19's close at $6.48 based on Friday's finish at $5.13. The firm has a market perform, or hold rating, on SUPERVALU with an $8 price target vs. Monday's close at $5.32
"[E]ven with the 35% short interest, ~7% dividend yield, reasonable valuation and ample liquidity, there appears to be no support (or no incremental buyer) for the stock," said the firm, which has a market perform rating on SUPERVALU and is expecting earnings of 39 cents a share in the quarter.
"We are hopeful 4Q12 represents a trough in performance and hope the company can present investors with meaningful positive data points to appease existing investors and generate an incremental buyer, because despite significant company specific and macro challenges, we see no liquidity issues for the foreseeable future, so believe the excessive selling pressure has been unwarranted," BMO continued.
SUPERVALU's forward price-to-earnings ratio sits at 4.45X vs. 9.49X for Kroger (KR), and 9.22X for Safeway (SWY), but bulls are still few and far between with just three of the 18 analysts covering SUPERVALU at either strong buy (1) or buy (2) and the rest split between hold (12), underperform (2) and sell (1).Check out TheStreet's quote page for SUPERVALU for year-to-date share performance, analyst ratings, earnings estimates and much more. The economic data doesn't pick up until late in the week with the producer price index and consumer price index for March until Thursday and Friday respectively, and the first read from the University of Michigan on consumer sentiment in April due on Friday as well. Tuesday features wholesale inventories for February at 10 a.m. ET. The consensus is for an increase of 0.5%, according to Briefing.com, but Wall Street likely won't get too excited one way or another, given how old the data is. And finally, Harmonic (HLIT) and VIVUS (VVUS) were both trading lower in Monday's after-hours action. A regulatory setback sent shares of VIVUS more than 8% lower to $20.98 on late volume of nearly 1.3 million. The Food and Drug Administration pushed back the Prescription Drug User Fee Act review date related to the new drug application for Qnexa, the company's proposed obesity drug, to July 17 from April 17. Harmonic shares lost 4% to $4.76 on volume of more than 90,000, according to Nasdaq.com, after the maker of video equipment lowered its revenue and gross margin outlook for the first quarter. The company cited weak demand from its European customers as part of the reason for the diminished forecast. --Written by Michael Baron in New York.
>To contact the writer of this article, click here: Michael Baron.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV