1. Albertsons Companies, Inc. (NYSE:ACI)
Forward P/E: 8.95
Number of Hedge Fund Holders: 70
Albertsons Companies, Inc. (NYSE:ACI) is a US-based food and drug retailer. It has over 2,269 stores across 34 states and the District of Columbia under 20 banners, including Star Market, Shaw’s, Albertsons, Kings Food Markets, United Supermarkets, Haggen, Kings Food Markets, Acme, Carrs, and more.
The company’s fiscal Q3 2024 revenue reached $18.8 billion, up 1.2% year-over-year but below analyst estimates. Albertsons Companies, Inc. (NYSE:ACI) is thus focusing on key strategies to drive growth. It is investing in pharmacy and health, which has driven sales penetration to over 11% of total annual revenue. Albertsons Companies, Inc. (NYSE:ACI) plans to continue investing to deliver consistent omni-execution for brand campaigns across its digital and physical assets. It also expects to build new partnerships to add digital inventory and capabilities to its platform.
It is also investing in its e-commerce business, which it runs out of its stores so its inventory is close to its customers. Its ecommerce investments have driven sales penetration to over 7% of grocery revenue. This growth has been supported by new developments in the company’s mobile app and improved quality, speed, and convenience of DriveUp & Go and in-home delivery.
Overall, ACI ranks first among the 10 cheap food stocks to buy according to hedge funds. While we acknowledge the potential of food stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ACI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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