The Dip in Kroger Stock Could Be a Gift. Here's How It Could Set You Up for Life.
Kroger's earnings miss grabbed headlines, but the real story with Kroger is the solid investment opportunity investors are overlooking.
The Dip in Kroger Stock Could Be a Gift. Here's How It Could Set You Up for Life.
Overview
Last Thursday was a rough day for Kroger (NYSE: KR) shareholders. The stock fell nearly 8% -- its largest single-day drop in close to five years -- after the grocery chain's first-quarter results landed one penny below Wall Street's earnings estimate. One penny. The irony of that drop is almost too on-the-nose for a company whose new CEO has spent his first 100 days publicly declaring that lower prices and more value for shoppers are his top priorities.
This is how the market works sometimes. A company posts $46.12 billion in quarterly revenue (beating expectations) and maintains its full-year guidance -- and yet the stock falls 8% because of a rounding error in earnings per share.
Details
The reaction has little to do with what Kroger actually is and everything to do with how investors feel right now: scared. Inflation just hit its fastest annual pace in more than three years. The Federal Reserve signaled the possibility of a rate hike in its most recent meeting, sending stocks to their worst "Fed day" since 1994. Consumer confidence sat at 93.1 in May. People are rattled, and rattled people sell.
Source
Originally published at www.fool.com.
