Grocery Outlet (NASDAQ:GO) Stock Jumps 4.4% - Here's What Happened

Key Points

• Grocery Outlet shares rose 4.4% to about $11.55 in Monday trading, though volume was roughly 94% below the stock’s average daily volume.
• Analysts remain cautious, with 12 Hold ratings and two Sell ratings producing a consensus “Reduce” rating and an average price target of $10.59.
• The company exceeded quarterly expectations, reporting $0.20 EPS versus $0.13 expected and $1.19 billion in revenue, while insiders recently increased their holdings through stock purchases.

Shares of Grocery Outlet Holding Corp. (NASDAQ:GO - Get Free Report) traded up 4.4% during trading on Monday. The company traded as high as $11.54 and last traded at $11.5530. 179,787 shares changed hands during mid-day trading, a decline of 94% from the average daily volume of 3,029,325 shares. The stock had previously closed at $11.07.

Analyst Upgrades and Downgrades

A number of research analysts have weighed in on GO shares. Weiss Ratings upgraded Grocery Outlet from a "sell (d-)" rating to a "sell (d)" rating in a report on Thursday, August 13th. Wells Fargo & Company raised their price target on Grocery Outlet from $9.00 to $11.00 and gave the company an "equal weight" rating in a report on Thursday, August 13th. TD Cowen reiterated a "hold" rating on shares of Grocery Outlet in a research note on Tuesday, August 18th. Deutsche Bank Aktiengesellschaft restated a "hold" rating and set a $9.00 price objective on shares of Grocery Outlet in a research report on Thursday, August 13th. Finally, DA Davidson lifted their price objective on 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 given a Sell rating to the company's stock. According to MarketBeat, the company presently has an average rating of "Reduce" and a consensus target price of $10.59.

Grocery Outlet Stock Performance

The company has a market capitalization of $1.10 billion, a P/E ratio of -2.88, a price-to-earnings-growth ratio of 7.70 and a beta of 0.72. The business has a 50 day moving average of $10.84 and a 200 day moving average of $9.10. 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 (NASDAQ:GO - Get Free Report) last released its quarterly earnings results on Wednesday, August 12th. The company reported $0.20 earnings per share for the quarter, beating the consensus estimate of $0.13 by $0.07. The company had revenue of $1.19 billion for the quarter, compared to analyst estimates of $1.17 billion. Grocery Outlet had a positive return on equity of 5.84% and a negative net margin of 8.04%.Grocery Outlet's quarterly revenue was up 1.1% compared to the same quarter last year. During the same quarter in the prior year, the firm posted $0.23 EPS. On average, sell-side analysts predict that Grocery Outlet Holding Corp. will post 0.42 earnings per share for the current year.

Insider Activity

In other news, Director Carey Jaros acquired 15,000 shares of the business's stock in a transaction dated Thursday, August 27th. The shares were acquired at an average cost of $11.70 per share, with a total value of $175,500.00. Following the completion of the acquisition, the director owned 60,000 shares of the company's stock, valued at approximately $702,000. This trade represents a 33.33% increase in their ownership of the stock. The acquisition was disclosed in a document filed with the SEC, which is accessible through this link. Also, insider Paul Miller bought 8,000 shares of the firm's stock in a transaction that occurred on Thursday, August 20th. The shares were acquired at an average price of $10.90 per share, with a total value of $87,200.00. Following the completion of the transaction, the insider directly owned 72,171 shares of the company's stock, valued at $786,663.90. This trade represents a 12.47% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. Corporate insiders own 5.60% of the company's stock.

Institutional Trading of Grocery Outlet

Several large investors have recently made changes to their positions in GO. BlackRock Inc. purchased a new position in Grocery Outlet during the 2nd quarter worth $152,440,000. Heartland Advisors Inc. purchased a new stake in shares of Grocery Outlet in the second quarter valued at about $6,606,000. Bank of America Corp DE acquired a new position in shares of Grocery Outlet during the second quarter worth about $6,138,000. Bank of New York Mellon Corp acquired a new stake in Grocery Outlet in the second quarter valued at about $5,500,000. Finally, CenterBook Partners LP lifted its position in Grocery Outlet by 262.2% in the fourth quarter. CenterBook Partners LP now owns 645,159 shares of the company's stock valued at $6,516,000 after purchasing an additional 467,019 shares during the period. 99.87% of the stock is currently owned by hedge funds and other institutional investors.

About Grocery Outlet

Grocery Outlet Holding Corp. operates a network of independently operated, extreme-value grocery stores in the United States. The company offers a rotating selection of branded and private-label products at discounted prices, including groceries, fresh produce, meat, dairy, frozen foods, beverages, snacks, household goods and health and beauty products.

Its merchandising model is based on opportunistic buying, allowing Grocery Outlet to purchase surplus inventory, packaging changes, discontinued products and other bargains from manufacturers and distributors.

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