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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Diamonds and Dogs

7/12/12

Supervalu Inc. (SVU)

Supervalu Inc. isn't super and has little value today, down 49.05% at$2.70. The retail and wholesale grocery chain lost half its value today after it suspended its dividend and said it is reviewing "strategic alternatives" to boost shareholder value. The company faced another brutal quarter, which prompted management to announce several turnaround initiatives. Some of these initiatives include aggressive price cuts, cost reductions, and a possible debt refinancing. Many analysts think it's just far too little, too late for the grocery chain to make a positive impact. The plunging shares of Supervalu set the company up for a potential sale. CEO Craig Herkert said, "We are evaluating the full range of opportunities available to us to create value for shareholders." A full range of opportunities might include a possible sale if there is a company interested in the purchase.

Texas Industries Inc. (TXI)

Texas Industries had gains as large as the state itself today, up 13.96% at $43.36. The heavy construction material company surprised analysts with a better than expected earnings report. For the quarter ended May 31 (Q4), Texas Industries missed estimates on revenue, yet beat expectations on earnings per share. Texas Industries logged revenue of $174.6 million. The eight analysts polled by S&P Capital IQ hoped for revenue of $184.3 million. EPS came in at $2.15 beating the nine earnings estimates compiled which forecasted $0.33 per share. Gross margin for the quarter was up 1,260 basis points at 16.3% and net margin was 34.5%, 3,970 basis points better than the prior-year quarter. Many analysts rated Texas Industries at underperform or hold, with an average price target of $35.43. However today, the company is well above $35 and set a new 52-week high.
Diamonds and Dogs market commentary is a journal of daily observations on anything that happens to be of interest to our author. Obviously, our primary focus is the stock market and world economic events, but for this page we have no defined topics. We want this page to be dedicated to the interests, concerns, and possibly to the financial gain of our clients and friends. All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.