Architect of Alpha
Long-Term Stock Investor
Kroger keeps quietly rewarding shareholders with dependable, defensive results, because everybody has to eat. In Q2 FY26 sales rose just 2% to $34.6B, but operating profit grew 12.5% to $971M as Kroger trimmed D&A and held costs flat. Net earnings rose 5%, while EPS jumped 15% to $1.05 because aggressive buybacks shrank the share count from 662M to 606M. x.comÂ
Kroger's push toward lower everyday prices and private label will squeeze legacy food brands from both sides: pressure on wholesale prices and lost share. Its three-year plan targets about $5 billion in customer-value investment and $4 billion in annualized cost savings. Retailers control shelves and consumers; weaker brands, neglected in favor of buybacks and M&A, may surrender more of the profit pool. Kroger itself risks pain from price wars. x.com x.com x.com x.com x.comÂ
Kroger's $1.65B acquisition of Giant Eagle is a clean M&A catalyst with a named target and price. It points more to a steady rerating and strategic expansion than a high-beta surge, making Kroger the best clean but possibly less explosive name in the day's news. x.comÂ
Toast's revenue growth and profitability should eventually lift its shares, but stock compensation has diluted shareholders despite those gains. Revenue has grown 250% since the IPO; shares outstanding rose from 502.5 million to 578 million, or 15%, with an estimated $2.4-3 billion in stock compensation. Management needs to deliver a 30% net profit margin ASAP to prove it can turn revenue growth into earnings for shareholders. Buybacks are now reducing the share count, which should help a lot. … Show more
Target's turnaround continues with a solid beat and raise. Same-store sales rose 3.8% and transactions 3.6%, with higher gross and operating margins. Guidance moved higher, beating a high bar, with a 120 bp increase in operating margin. x.comÂ
Mastercard, AutoZone, Booking, Apple, Caterpillar, ADP and Fair Isaac are buyback machines, among the best stocks to own, because each has consistently reduced its share count. That raises each shareholder's ownership stake every quarter without lifting a finger. x.com x.com x.com x.com x.com x.com x.comÂ
Ingles Markets is not just a grocer but part retailer, part manufacturer and part real estate company. That combination protects margins in thin-margin grocery, reduces reliance on suppliers and landlords, and creates long-term asset value. x.comÂ
Casey's General Stores is a buy on its 15% dip because its moat, a top-five pizza chain inside a convenience store, will outlast fading peak fuel margins. It beat EPS by a wide margin, and 3.2% inside comps hide a 7.7% two-year stack and a 42.2% inside margin. Management reaffirmed 2-5% inside comps, 8-10% EBITDA growth and 120+ new stores, with a three-year plan for 400 stores and $2B of FCF after over-delivering last time. The Street sees $800-$840 versus about $622 now. x.comÂ
Procter & Gamble is attractive at about 21.5x earnings. It is not a bargain, but it offers a modest margin of safety with growth picking up in 2027 and 2028, supporting a projected 12-month return of 20%. x.comÂ
Coca-Cola looks like a great funding short, since nothing makes it immune to the risks that battered its staples peers. GLP-1 drugs, store brands, new entrants and supply-chain inflation should hit it too, and non-sugar drinks only slow the U.S. decline, though international has held up better. About 2% revenue growth is thin support for 25x earnings while peers sit at 2008 valuations; it could fall to 15x unless the other staples rebound dramatically. x.com x.com x.com x.com x.com x.com x.com … Show more
Costco is a wonderful execution story whose business only gets better through consumer pain. Its Kirkland brand is more valuable than 90% of consumer brands today. The stock has been too expensive this cycle, and not owning it in size was a mistake; it is worth owning, though the right entry level is unclear. Sysco's moves illustrate the deeper transformation underway. x.comÂ
