9 Best Pizza Stocks to Buy Now

2. The Kroger Co. (NYSE:KR)

Number of Hedge Fund Holders: 46

Upside Potential: 11.23%

The Kroger Co. (NYSE:KR), based in the U.S., is a retail company, running supermarkets and multi-department stores all across the U.S. The retailer has a strong presence in the frozen pizza segment, selling pizzas of all sorts of flavors.

The stock is all for the gainers, as The Kroger Co. (NYSE:KR) is doing all it can to realize its merger of Albertsons Cos., the company’s rival. The proposed merger is worth $25 billion and it will mean over 4,000 stores under the name of Kroger.

However, the merger is yet to be realized; the trial for this matter is set to take place in September 2024. But Kroger has announced that it will reduce grocery prices by a significant $1 billion given that the merger takes place in a bid to please regulators. Thus, it seems like the company wishes to materialize the merger at any cost, which increases the prospects of growth for the company in coming times, given the market share gain it would bring for Kroger.

Kroger had a decent go in Q1 2025 ending May 25, 2024, wherein the company reported total sales of $45.3 billion, which were up by 0.6% year over year. The gross profit margin, however, took a dip of seven basis points, as lower pharmacy margins drove the overall margins down. Operating expenses also rose in the quarter by 22 basis points because of wages and higher incentive plan costs.

The company expects its full-year FIFO operating profit to grow in the range of somewhere between $4.6-$4.8 billion in 2025 from $3.1 billion recorded in the fiscal year 2024. Moreover, Kroger expects to incur capital expenditure (Capex) of $3.4-$3.6 billion, while maintaining a free cash flow of $2.5-$2.7 billion, which speaks a lot about the company’s future investments while maintaining a healthy cash position.

Kroger is continuing to expand as it introduced 346 new brands of its own. Moreover, the company’s fulfillment centers drove delivery sales by 17% in the quarter, further showcasing its robust growth being in line with rapidly changing technology.

With four states’ attorneys general in the U.S. speaking in favor of the proposed merger, and with the planned investments of $1 billion in lower grocery prices, along with an additional $1.3 billion to improve Albertsons stores, 46 hedge funds are bullish on the stock, as of Q2, 2024. Warren Buffet’s Berkshire Hathaway has invested $2.5 billion in the stock. Plus, the stock has upside potential of 11.23% according to 17 analysts.