10 Cheap Value Stocks to Invest in According to Warren Buffett

7. The Kroger Co. (NYSE:KR)

Forward Price to Earnings Ratio: 12.59

Berkshire Hathaway Stake Value: $2.87 Billion

Number of Hedge Fund Holders: 39

The Kroger Co. (NYSE:KR) is a food and drug retailer in the United States that operates combination food and drug stores, multi-department stores and marketplace stores. While the company has faced a challenging retail market coupled with stiff competition, it has redefined itself with a focus on online sales amid the digital revolution. Investors have shown increased confidence in Kroger’s strategic initiatives and its ability to adapt to the evolving demands of consumers, pushing it higher.

The company’s digital sales increasing by 11% in the fiscal third quarter of 2024 affirms a new avenue for growth. Delivery sales were up by 18%, driven by customer fulfilment centres. The fact that digital sales account for just 10% of total sales also underlines the massive opportunity for growth amid the digital revolution. The Kroger Co. (NYSE:KR) reported a substantial  51 basis point improvement in gross margin to 22.9%  thanks to competitive pricing.  Earnings per share in the quarter increased to $0.98 compared to $0.95 in the same quarter last year.

The better-than-expected earnings, characterized by robust digital sales, come from Kroger’s focus on expanding its private label offerings and enhancing digital shopping capabilities. Additionally, the retailer remains focused on enhancing customer loyalty, expanding its digital footprint, and, most importantly, engaging in competitive pricing to drive sales and strengthen profit margins. Despite worries about budgetary restraints and consumer trade-downs, The Kroger Co.’s (NYSE:KR) performance indicates that it can continue to be profitable under a range of market circumstances.