Penn Wealth Publishing

2021.01.10 Penn Wealth Report Vol 9 Issue 01

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10 Jan 2021 penn wealth Report volume 9 issue 01 19 Penn Wealth Report Copyright 2021. All Rights Reserved. investment intelligence Under The radar Four investments being ignored—or missed—by the financial press e Kroger Company Consumer Defensives Grocery Stores The Kroger Co. (KR $32) is the nation's largest grocery store chain based on sales ($122B in 2020), with the company operating nearly 3,000 supermarkets throughout the country. And CEO Rodney McMullen has kept his 138-year-old firm looking fresh, with online ordering and curbside pick up at 72% of the stores, and home delivery options for 97% of the customer base. Kroger Ship, which launched last year, marks a major new push into eCommerce. e program provides online customers access to over 50,000 items in categories such as organic foods, international foods, housewares, and toys. With a tiny multiple of 8.5 and a pullback in the share price, this consumer defensive value play truly appears to be an under-the-radar gem ripe for the picking. Embotelladora Andina Consumer Defensives Beverages Yara International ASA Basic Materials Agricultural Inputs e GEO Group Real Estate Healthcare REITs Embotelladora Andina (AKO.B $15) is a Chilean-based Coca-Cola bottler serving the Latin American region. Together with its subsidiaries, the company produces, mar- kets, and distributes Coca-Cola trademark products, to include fruit juices, sports drinks, purified waters, and flavored waters. The firm also sells and distributes beer under the Amstel, Bavaria, Heineken, and Sol brands. On $2.5 billion in sales last year, the company brought in $248 million in profit. AKO.B offers investors a 5.61% div- idend yield based on the current share price of $15. Yet another consideration for globally-diversifying a portfolio. Yara International ASA (YARIY $21) is a crop nutrition company based out of Oslo, Norway. e $10 billion agricultural inputs firm produces nitrogen-based fertilizers, raw material for feed products, and a broad base of other ag input products for farms and co-ops. Most of Yara's $12 billion in annual sales emanates from Europe and Brazil, where the company has built a large and relatively "sticky" customer base. Founded in 1905, Yara has a strong financial position, a reasonable PE ratio of 17, an unusually-steady stock price, and a dividend yield of 8.28%. The GEO Group (GEO $9) is a real estate investment trust specializing in detention facilities and community-reentry facilities. e company leases and oversees secure deten- tion centers, rehab facilities, and service centers for troubled youth. Services include counseling, education, drug abuse treatment, tech-based supervision, and detainee trans- portation. Most of GEO's revenue comes from the leasing and management of these facilities in the US, Australia, South Africa, and the UK. e company had a net income of $167 million last year on $2.5 billion in revenue. Private prison stocks have stumbled since the election under the assumption that a Democrat in the White House would spell trou- ble for non-government entities in this arena. With the nature of GEO's work, however, we think investors miscalculated on this one. 3 2 1 4

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