It's time to put

Albertson's

(ABS)

in your shopping cart.

I know, supermarkets are boring and business is tough, with even the best companies making just pennies on each revenue dollar. But I like this management, led by Jack Welch disciple Larry Johnston, and I'm encouraged by efforts to improve the product mix and to expand the higher-margin private-label business. Cutting costs, boosting advertising and targeting loyal customers should jump-start earnings; expect Albertson's shares to rise 20% by this time next year.

After years of slow growth, Albertson's is getting its house in order. The company will close 165 underperforming stores and lay off an unspecified number of middle managers and administrative employees. Cost savings should reach $100 million by 2003. Sources suggest additional cost-cutting measures will be announced by year-end.

The company is also moving to capitalize on customer loyalty by using a new database that can track purchases. This technology, known as the Catalina System, can be used to direct special offers to individuals or groups based on their shopping preferences. A push to expand Albertson's loyalty card program is also afoot.

Larry Johnston is a darn good manager. He was the president of

General Electric's

(GE) - Get Report

Appliances Division, and his proven ability to operate in a difficult environment makes him well suited for the job.

Although Albertson's trades near its 52-week high, I'm seeing real upside -- I expect to see the stock at $40 a year from now, up from the $33 range now. Why? Well, the company is poised to show double-digit earnings growth for at least the next three to five years. How many companies out there can say that?

In keeping with TSC's editorial policy, Glenn Curtis doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Curtis welcomes your feedback.