5 Best Grocery Stocks to Buy

2. Target Corporation (NYSE: TGT)

Number of Hedge Fund Holders: 60

Target Corporation (NYSE: TGT) is a general merchandise retailer in the US offering various products, including grocery items such as dairy, frozen food, and dry grocery. The company sells its products online as well as through its outlets, and as of January 2021, it was operating almost 1,897 stores. It ranks 2nd on our list of the best grocery stocks to buy.

On June 8th, Target Corporation (NYSE: TGT) was upgraded to a Buy by UBS after the latter witnessed structural improvements. The price target was hiked to $265 from $210. 21 other firms have a Buy-equivalent rating or higher on the company as well. In the first quarter of 2021, the company’s EPS was valued at $0.59, beating estimates by $0.19. Its revenue came in at $19.61 billion, representing an 11.28% growth year over year and beating estimates by $576.64 million. Target Corporation (NYSE: TGT) has a gross profit margin of 30.1% and has gained 35.89% in the past 6 months and 33.81% year to date.

By the end of the first quarter of 2021, 60 hedge fund holders held stakes in Target Corporation (NYSE: TGT), valued at roughly $4.76 billion. This is compared to 78 hedge fund holders in the previous quarter with a total stake value of roughly $4.06 billion.

LRT Capital Management, an investment management firm, mentioned Target Corporation (NYSE: TGT) in their first quarter 2021 investor letter. Here’s what they said:

“Target, the Minneapolis-based retailer, continues to fire on all cylinders as the company has reported two quarters in a row of +20% revenue growth (5% traffic growth + 15% average basket size6 ), coupled with the strongest EBITDA margins in over four years. The company has successfully navigated the Covid-19 pandemic with online sales growing by 155% and 118% during Q3 2020 and Q4, respectively.

On March 2nd, the company reported another stellar quarter, with same-store sales growing by over 20%, and both earnings (+57% YoY) and revenues (+21% YoY) beating estimates. The shares are up 14.11% year-to-date. We believe the shares are a bargain 23x trailing and 20x forward earnings.”