10 Best Grocery Stocks To Invest In Now

7. Casey’s General Stores, Inc. (NASDAQ:CASY)

Number of Hedge Fund Holders: 36

Casey’s General Stores, Inc. (NASDAQ:CASY) operates over 2,500 convenience stores across 17 states in the Midwestern and Southern U.S., making it the third-largest convenience store chain in the country.

Evercore ISI recently raised its price target for Casey’s General Stores, Inc. (NASDAQ:CASY) from $435 to $440 while maintaining an Outperform rating. This update follows insights from Casey’s Investor Day, where the firm gained clarity on the company’s strategy to achieve an 8-10% EBITDA growth target. The company is also exploring small to mid-sized mergers and acquisitions, which could lead to 4% unit growth. These acquisitions are viewed favorably, with purchase prices between 6-9 times EBITDA, compared to Casey’s own multiple of 12 times. The acquisition of CEFCO in September in particular is expected to add $90 million in EBITDA, plus synergies, over the next few months, further supporting growth into 2025.

In the first quarter of fiscal 2025, Casey’s reported strong financials, with diluted earnings per share rising 7% to $4.83 and net income growing 6% to $180 million, while EBITDA improved by 9% to $346 million. Moreover, the company’s in-store sales increased by 2.3%, and fuel same-store gallons sold grew slightly by 0.7%.

ClearBridge SMID Cap Growth Strategy stated the following regarding Casey’s General Stores, Inc. (NASDAQ:CASY) in its Q2 2024 investor letter:

“Stock selection in the consumer staples sector also proved beneficial, primarily driven by our holdings in Casey’s General Stores, Inc. (NASDAQ:CASY) and BJ’s Wholesale Club (BJ). An operator of gas stations and convenience stores, Casey’s is now reaping the rewards of its aggressive reinvestment in its stores over the past decade, building its private label brand and broadening its product offerings. This has not only helped boost same-store sales but also encouraged repeat traffic, allowing the company to buck broader industry trends toward contraction in gas volumes and margins. Finally, the company’s strategy of choosing locations in smaller and more remote markets has afforded it stronger pricing power.”