Solas Capital Management LLC Invests $11.37 Million in Grocery Outlet Holding Corp. $GO

Key Points

• Solas Capital Management purchased 1.14 million Grocery Outlet shares worth approximately $11.37 million, making the position 6.1% of its portfolio and representing about 1.15% of Grocery Outlet’s outstanding stock.
• Institutional ownership remains very high at 99.87%, with major investors including BlackRock, T. Rowe Price, Millennium Management, UBS, and Boston Partners increasing or initiating positions.
• Grocery Outlet exceeded quarterly earnings expectations, reporting $0.20 in EPS versus a $0.13 consensus estimate and $1.19 billion in revenue. Despite recent price gains, analysts maintain a consensus “Reduce” rating with a $10.59 target price.

Solas Capital Management LLC purchased a new stake in Grocery Outlet Holding Corp. (NASDAQ:GO - Free Report) in the 2nd quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission. The fund purchased 1,139,058 shares of the company's stock, valued at approximately $11,368,000. Grocery Outlet accounts for 6.1% of Solas Capital Management LLC's holdings, making the stock its 7th largest position. Solas Capital Management LLC owned approximately 1.15% of Grocery Outlet at the end of the most recent quarter.

A number of other large investors have also made changes to their positions in GO. BlackRock Inc. bought a new position in Grocery Outlet during the second quarter worth about $152,440,000. T. Rowe Price Investment Management Inc. increased its holdings in shares of Grocery Outlet by 54.0% in the fourth quarter. T. Rowe Price Investment Management Inc. now owns 15,763,945 shares of the company's stock worth $159,216,000 after acquiring an additional 5,528,722 shares in the last quarter. Millennium Management LLC increased its holdings in shares of Grocery Outlet by 3,558.0% in the third quarter. Millennium Management LLC now owns 1,825,407 shares of the company's stock worth $29,298,000 after acquiring an additional 1,775,505 shares in the last quarter. UBS Group AG raised its position in shares of Grocery Outlet by 87.6% during the fourth quarter. UBS Group AG now owns 2,726,299 shares of the company's stock worth $27,536,000 after purchasing an additional 1,272,859 shares during the period. Finally, Boston Partners raised its position in shares of Grocery Outlet by 219.7% during the third quarter. Boston Partners now owns 1,462,633 shares of the company's stock worth $23,475,000 after purchasing an additional 1,005,126 shares during the period. Institutional investors own 99.87% of the company's stock.

Grocery Outlet Price Performance

NASDAQ GO opened at $12.04 on Tuesday. The company has a quick ratio of 0.30, a current ratio of 1.29 and a debt-to-equity ratio of 0.60. Grocery Outlet Holding Corp. has a 12-month low of $5.66 and a 12-month high of $19.23. The company has a market capitalization of $1.19 billion, a PE ratio of -3.11, a price-to-earnings-growth ratio of 8.87 and a beta of 0.65. The firm's 50 day moving average is $9.95 and its 200-day moving average is $8.73.

Grocery Outlet (NASDAQ:GO - Get Free Report) last announced its earnings results on Wednesday, August 12th. The company reported $0.20 EPS for the quarter, topping the consensus estimate of $0.13 by $0.07. Grocery Outlet had a negative net margin of 8.04% and a positive return on equity of 5.84%. The business had revenue of $1.19 billion during the quarter, compared to analysts' expectations of $1.17 billion. During the same quarter in the prior year, the company posted $0.23 earnings per share. The firm's revenue was up 1.1% on a year-over-year basis. Equities research analysts anticipate that Grocery Outlet Holding Corp. will post 0.39 earnings per share for the current fiscal year.

Analyst Ratings Changes

Several equities analysts have recently weighed in on the company. Weiss Ratings upgraded Grocery Outlet from a "sell (d-)" rating to a "sell (d)" rating in a report on Thursday, August 13th. Roth Capital reissued a "neutral" rating and set a $10.00 target price on shares of Grocery Outlet in a research note on Thursday, August 13th. UBS Group raised their target price on shares of Grocery Outlet from $10.00 to $11.50 and gave the stock a "neutral" rating in a report on Monday, August 17th. Morgan Stanley upped their price target on shares of Grocery Outlet from $7.00 to $11.00 and gave the company an "equal weight" rating in a report on Thursday, August 13th. Finally, DA Davidson raised their price objective on shares of Grocery Outlet from $9.00 to $12.00 and gave the stock a "neutral" rating in a report on Thursday, August 13th. Twelve investment analysts have rated the stock with a Hold rating and two have issued a Sell rating to the company's stock. According to MarketBeat.com, the stock presently has an average rating of "Reduce" and a consensus target price of $10.59.

Insider Activity at Grocery Outlet

In related news, insider Paul Blaine Miller acquired 10,000 shares of the firm's stock in a transaction dated Thursday, June 18th. The stock was bought at an average price of $9.37 per share, for a total transaction of $93,700.00. Following the acquisition, the insider directly owned 59,171 shares of the company's stock, valued at approximately $554,432.27. The trade was a 20.34% increase in their ownership of the stock. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. In the last three months, insiders have bought 23,000 shares of company stock worth $228,400. Corporate insiders own 5.60% of the company's stock.

Grocery Outlet Profile

Grocery Outlet Holding Corp. NASDAQ: GO is a specialty discount retailer that offers consumers deeply discounted groceries by purchasing excess inventory, closeouts, and overstocks from manufacturers and distributors. Headquartered in Emeryville, California, the company operates two primary banners—Grocery Outlet and Fresh2Go—with a combined footprint of more than 400 stores. Its product assortment spans fresh produce, meat, dairy, bakery items, household staples, natural and organic offerings, and select specialty products, all sold at significant markdowns compared to conventional supermarkets.

The company's unique buying model enables it to source inventory through opportunistic purchases of surplus freight, discontinued items, and closeout deals, which it then passes on as savings to its customers.

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