I’ve been gone from Casey’s for quite a while but I stumbled on this today. Casey’s got rated the Zack’s Bear of the Day about a month ago. Don’t know what significance to give it.
Casey’s General Stores, Inc. (CASY) is going through a rough patch as small town America is eating out less. This Zacks Rank #5 (Strong Sell) has missed four quarters in a row…
…Casey’s Missed Again. On March 6, Casey’s reported its fiscal third quarter earnings and missed for the fourth time. It reported earnings of just $0.58 compared to the Zacks Consensus Estimate of $0.88…Casey’s described “pressures” in its operating area throughout the quarter.
I still hold a position in Casey’s.
It is also a stock in my portfolio to beat the market. (I plan an update on this soon. I would have done this sooner but I have been busy moving from Wales to Spain.)
Casey’s is a solid, steady-growth business based upon replicating its small town convenience store formula. It has a good growth runway in the long term, because it has many more locations in which to open stores.
In the short term it has suffered a number of head winds, so short term performance has not been great. (Look at a ten year chart and you will see what I mean).
It’s a stock for the patient, LTBH investor - so I wouldn’t see it as being up your street.
It’s not straightforward to analyse using traditional metrics. The fuel business has erratic gross margins which can disguise the true performance of the business. The company has heavy debt, but this is compensated by strong cash flow. The property portfolio makes the company a much safer investment than the balance sheet would suggest.
I plan to hold indefinitely. I would point Stock Advisor members to look at TMF1000’s latest page post (Post no 1195 on the CASY board).
Caseys is one of those stocks I’ve looked at but will not invest in.
I like to be able to experience in person any retail/service company before I would feel comfortable investing in it. For example I invested in Starbucks when they first started popping up all around me in NYC a couple of decades ago. You add a really big miss last quarter and I wonder about management and their ability to steer a publicly traded company to steady long term growth going forward. I never own more then 12 stocks, so I have to be much more selective then most. Right now I’m only in 8.
My decision of course could be totally wrong, but I always remind myself that there are thousands of companies I do not own so I won’t participate in their future, up or down.
That said, I hope CASY doubles in the next year for those who own it.