Thierry from arvy
CFA, Co-Founder & CIO of arvy, Quality Investing
Casey's General Stores is a quiet compounder built on roughly 2,900 local monopolies in rural Midwest towns too small for rivals, where fuel draws traffic and fresh pizza earns the profit. About half its stores sit in towns under 5,000 people, and it is the fifth-largest US pizza chain. Inside margins run 41-42%, FY2025 revenue was $15.9 billion, and recent EPS grew 14-20%. It plans about 500 more locations over three years and has raised its dividend for 25 straight years. 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
Casey's General Stores is getting interesting after a 15% drop, with store growth and owned real estate supporting value, though 25x earnings would be the preferred entry. It targets 120 new stores in FY27, and remodeled CEFCO sites see about 30% prepared food and dispensed beverage lifts. It owns 2,703 of its 2,944 stores, worth roughly $6.8B at $2.5M each, about 25-35% of its equity value, offering sale-leaseback optionality. x.com x.com x.comÂ
Casey's General Stores is not a buy despite its largest drawdown since 2008, because its valuation had become historically stretched beforehand. A 33.6% fall from highs, per Fiscal.ai, looks like a deal only until that prior valuation is considered. There is no interest in adding at current levels, and no fear of missing out if the stock does not go lower. x.comÂ
Yesway's IPO looks unappealing: its financials, debt and business model are unimpressive, and its Texas-heavy Allsup's stores lack the differentiation of Casey's food or Murphy USA's no-interior format. Ordinary convenience stores are struggling, with many 7-Elevens and Circle Ks closing. It first filed for an IPO in October 2021 but never completed it. It isn't fully ruled out. x.comÂ
First Watch is growing with self-funded discipline while the market is on edge about the consumer. Q2 2026 same-restaurant sales rose 3.4%, a 6.9% two-year stack, both beating guidance and peers. It committed to funding future growth from organic cash generation at roughly 50 new stores a year. x.comÂ
Domino's Pizza is a global logistics, software and franchise platform whose economics improve as the network grows. Franchisees fund expansion while Domino's collects high-margin royalties, and scale brings data, ad efficiency and buying power; it has beaten Alphabet over 20 years. As a rough thought exercise, 10% annual growth from about $17 EPS implies over $100 in 20 years, and at 15-25x a business potentially worth about $2,000 a share. Franchisee economics and aggregators are risks. x.com … Show more
Dollar General faces limited square-footage growth as Amazon goes after rural food deserts. Andy Jassy's shareholder letter read as incrementally bearish for dollar stores. This counters a reply arguing Dollar General is too cheap given a much stronger balance sheet. x.comÂ
Getty Realty looks cheap, so its 7% yield pays investors to wait for a rerating. The net lease REIT, which owns convenience stores, gas stations, car washes and auto service centers, trades at 11.1x P/AFFO against a historical 14.2x. Shares could deliver over 30% annualized total returns. x.comÂ
Consumer-facing stocks remain vulnerable as even middle and upper-middle income shoppers pull back. Dave & Buster's fell 15% on ongoing "entertainment weakness", dragging the sector including Texas Roadhouse. Dollar General said at a Goldman conference that customers across income cohorts are somewhat distressed, with middle to upper-middle shoppers acting like lower-income ones. Diesel near $7 and gasoline near $4.50 add about $700M a day in fuel costs versus a year ago. x.com x.com x.com x.com … Show more
