Latest news with #ArkoCorp
Yahoo
01-05-2025
- Business
- Yahoo
Recession Resistant Investing: Is Arko Corp. (ARKO) the Best Grocery Stock to Buy Now?
We recently published a list of . In this article, we are going to take a look at where Arko Corp. (NASDAQ:ARKO) stands against other best grocery stocks to buy now for recession resistant investing. On April 24, Bryan Spillane, BofA Securities senior consumer analyst, appeared on CNBC's 'The Exchange' to talk about food stocks and how higher costs are weighing on consumers. He said that the biggest incremental headline right now is that costs are a bigger risk than anticipated going into the recent earnings season. Although there is a lot of focus on revenue risk, costs have taken the lead, and tariff risks are also affecting companies across the consumer staples industry. Companies are sending marketing messages to consumers saying that they won't be raising prices, which is something consumers didn't see during COVID-19. These trends are raising concerns about margin pressures across corporate America. Addressing these questions, Spillane said these companies no longer have the ability to price. If there are incremental costs, whether from tariffs or other sources, they will either come from additional cost-cutting or result in margin pressure. Margin pressure is materializing in some major companies in the consumer staples sector, and it is likely to persist into the next quarter as well. READ ALSO: and . These trends raise the question of whether consumer staples are an area of stability amid current market volatility and macroeconomic concerns. Spillane said that this is a very similar dynamic to what we have seen in the last month or so, which is that the stocks have held in relatively well, even though earnings estimates have come down. He further said that we have to be very selective from here onwards. Consumer staple companies that do not have negative earnings revision risks are a decent place to hide amid the current market dynamics. However, he warned that the fundamentals are decelerating for the consumer staple companies. These stocks are likely to remain under pressure if market fundamentals continue the way they are. We discussed the risks of recession looming over the stock market in a recently published article on . Here is an excerpt from the article: Threats of an impending recession are looming over the stock market due to Trump's tariffs and macroeconomic uncertainty. According to CNBC's quarterly CFO Council Survey for Q1 2025, a majority of chief financial officers are of the opinion that the economy is likely to fall into a recession in H2 2025. The CFOs said that they were generally 'pessimistic' about the overall state of the American economy, and expressed uncertainty about the stock market. With the risk of an impending recession deepening, let's look at the 10 best grocery stocks to buy now for recession-resistant investing. We sifted through stock screeners, financial media reports, and ETFs to compile a list of 15 major grocery stocks and chose the top 10 with the highest number of hedge fund holders as of Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey's database. The list is ordered in ascending order of hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (). A busy convenience store with customers stocking up on fuel and Corp. (NASDAQ:ARKO) is an independent convenience store operator with four segments: Retail, Wholesale, Fleet Fueling, and GPMP. The company operates its stores under a brand portfolio of more than 25 regional brands, including Admiral, Apple Market, Flash Market, Dixie Mart, 1-Stop, Handy Mart, Jetz, Jiffi Stop, and more. The company is making considerable progress in its dealerization program, exceeding its initial conversion goal by transitioning over 150 retail stores to dealer sites in fiscal year 2024. Arko Corp. (NASDAQ:ARKO) plans to do the same for over 100 stores by the end of fiscal Q1 2025, reflecting its focus on optimizing its retail operations and ranking it eighth on our list of grocery stocks for recession-resistant investing. It also attained a 200 basis point improvement in the OTP category's gross margin in fiscal Q4 2024, further extending the gap between traditional cigarettes and higher-margin OTP products. This highlights Arko Corp.'s (NASDAQ:ARKO) focus on boosting profitability in this segment, which bodes well for its future operations. Overall, ARKO ranks 8th on our list of the best grocery stocks to buy now for recession resistant investing. While we acknowledge the potential for ARKO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ARKO but trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
19-04-2025
- Business
- Yahoo
Is Arko Corp. (ARKO) the Best Quality Penny Stock to Buy According to Hedge Funds?
We recently published a list of 11 Best Quality Penny Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Arko Corp. (NASDAQ:ARKO) stands against other best quality penny stocks. The quality factor in stocks refers to companies with strong fundamentals, financial stability, and reliable performance, with an aim for resilience rather than speculative growth. Quality stocks can be proxied through several metrics – as Hsu, Kalesnik, and Kose put it in their 2019 paper: 'Quality as an investment factor is systematically associated with persistent profitability, low leverage, and stable earnings growth.' Besides that, these stocks often exhibit high revenue growth, good management practices, and a sustainable competitive advantage reflected through double-digit return on invested capital. The attractiveness of quality stocks consists in their lower volatility, defense capabilities, and ability to outperform the broad market during recessions or periods of pronounced uncertainty. In the context of penny stocks, the quality factor becomes elusive, as most penny stocks inherently lack stable fundamentals, carry higher volatility, and often possess weaker balance sheets. Nevertheless, it is still positive to find quality penny stocks, which results in a powerful blend of high growth and high return features with resilience and consistency of growth. The best quality penny stocks are likely to deliver robust high growth even during market downturns and outperform the benchmark by a wide margin. The positive effect of the quality factor on stock returns has been proven by leading researchers, such as the Asness, Frazzini, and Pedersen (2019) paper. Here's an excerpt from the paper: 'High-quality stocks have higher risk-adjusted returns than low-quality stocks… A quality-minus-junk (QMJ) factor earns significant risk-adjusted returns in U.S. and global stocks.' READ ALSO: 11 Best Fundamentally Strong Penny Stocks to Buy Now. The primary takeaway for readers is that incorporating quality penny stocks in a portfolio can boost the overall return of the portfolio per unit of risk, which has always been the ultimate goal of many successful investors. However, the quality factor tends to perform better in specific market periods, and we believe the US stock market has entered such a period for the following reasons. First, smart money tends to flock into quality stocks with stable profitability, cash flows, and strong revenue growth in periods of uncertainty. The US stock market is currently shaken by the Trump tariffs. The uncertainty persists as of April 1, as evidenced by the VIX volatility index being at a value of 31, more than 50% above the daily 200 moving average. Second, there are reasons to expect a significant deceleration in GDP and earnings growth in the first half of 2025, as the cuts in public spending as well as the tariffs uncertainty are a huge headwind for private spending and Capex – CEOs tend to be reluctant to invest heavily into the business when they lack visibility for the near-term. Consequently, the odds are that Q1 2025 earnings, once reported, will show a sequential slowdown in growth. FactSet Insight showed that the Q2 2025 earnings growth for the US stock market is expected at +7.2% YoY, significantly below the +18.2% actual for the previous 4Q 2024. Keep in mind that there's still potential for actual growth to come even lower than the +7.2% estimate. Last but not least, the S&P index remains below its daily 200 moving average, an area where nothing good tends to happen. The last time the market broke below the 200 moving average was in January 2022, which resulted in a 12-month-long bear market with an absolute drawdown of -28%, much above the current -13%. This means that the current market correction may not be over yet; if the broad market stays in red territory, it is inevitable that money will start flowing increasingly toward high-quality stocks and penny stocks, boosting their valuations. All in all, the aforementioned findings support the thesis that the quality factor will be favored over the following months, which means we might be at an opportune time to buy the best quality penny stocks. A busy convenience store with customers stocking up on fuel and merchandise. We used a stock screener to identify companies with a share price under $5.00 that have at least 20% revenue CAGR in the last 5 years and a positive net profit margin. Then we compared the list with our proprietary database of hedge funds' ownership and included in the article the top 11 stocks with the largest number of hedge funds that own the stock as of Q4 2024. The stocks are ranked in ascending order. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points ().Arko Corp. (NASDAQ:ARKO) is among the largest operators of convenience stores and fuel wholesalers in the US. The company manages a diverse portfolio of over 25 regional store brands, including Fas Mart, E-Z Mart, and ExpressStop, and operates across four segments: retail (fuel and merchandise sales to consumers), wholesale (fuel supply to third-party dealers), fleet fueling (proprietary cardlock locations and fuel card programs), and GPM Petroleum (fuel supply to the company's own retail and wholesale sites). The company's large scale and stable performance across business cycles make it one of the best penny stocks to buy. Arko Corp. (NASDAQ:ARKO) delivered results near the midpoint of their annual guidance in 2024, despite facing challenging macro conditions characterized by persistent inflation and constrained consumer spending. The company's fourth quarter adjusted EBITDA was $56.8 million compared to $61.8 million in the prior year period, while full-year 2024 adjusted EBITDA reached $248.9 million versus $276.3 million in 2023. The company made significant progress on its dealerization program, converting more than 150 retail stores to dealer sites in 2024, with approximately 100 more stores expected to be converted by the end of Q1 2025. Going forward, Arko Corp. (NASDAQ:ARKO) expects total company adjusted EBITDA for 2025 to be in the range of $233 million to $253 million, with the dealerization program expected to generate an annualized benefit exceeding $20 million to combined wholesale and retail segment operating income. The company is implementing strategic initiatives, including the 'Fueling America's Future' campaign, which offers customers up to $2 off per gallon for up to 20 gallons when purchasing value promotions inside stores. Additionally, ARKO has completed more than 800 tobacco back bar refreshes and saw a 200-basis point improvement in gross margin for the OTP category. Overall, ARKO ranks 6th on our list of best quality penny stocks to buy according to hedge funds. While we acknowledge the potential of ARKO to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ARKO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
06-03-2025
- Business
- Yahoo
Only Three Days Left To Cash In On Arko's (NASDAQ:ARKO) Dividend
Arko Corp. (NASDAQ:ARKO) stock is about to trade ex-dividend in 3 days. The ex-dividend date occurs one day before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is important as the process of settlement involves a full business day. So if you miss that date, you would not show up on the company's books on the record date. This means that investors who purchase Arko's shares on or after the 10th of March will not receive the dividend, which will be paid on the 21st of March. The company's next dividend payment will be US$0.03 per share, and in the last 12 months, the company paid a total of US$0.12 per share. Calculating the last year's worth of payments shows that Arko has a trailing yield of 2.8% on the current share price of US$4.25. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! We need to see whether the dividend is covered by earnings and if it's growing. Check out our latest analysis for Arko Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Last year Arko paid out 92% of its profits as dividends to shareholders, suggesting the dividend is not well covered by earnings. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. What's good is that dividends were well covered by free cash flow, with the company paying out 18% of its cash flow last year. It's good to see that while Arko's dividends were not well covered by profits, at least they are affordable from a cash perspective. Still, if the company continues paying out such a high percentage of its profits, the dividend could be at risk if business turns sour. Click here to see the company's payout ratio, plus analyst estimates of its future dividends. Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's comforting to see Arko's earnings have been skyrocketing, up 33% per annum for the past five years. Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Arko has delivered 14% dividend growth per year on average over the past three years. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it. From a dividend perspective, should investors buy or avoid Arko? It's good to see earnings per share growing and low cashflow payout ratio, although we're uncomfortable with Arko's paying out such a high percentage of its profit. In summary, it's hard to get excited about Arko from a dividend perspective. So while Arko looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Our analysis shows 5 warning signs for Arko and you should be aware of them before buying any shares. A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
02-03-2025
- Business
- Yahoo
Arko (NASDAQ:ARKO) Has Announced A Dividend Of $0.03
The board of Arko Corp. (NASDAQ:ARKO) has announced that it will pay a dividend of $0.03 per share on the 21st of March. Based on this payment, the dividend yield on the company's stock will be 2.7%, which is an attractive boost to shareholder returns. While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Arko's stock price has reduced by 37% in the last 3 months, which is not ideal for investors and can explain a sharp increase in the dividend yield. See our latest analysis for Arko A big dividend yield for a few years doesn't mean much if it can't be sustained. Prior to this announcement, Arko's dividend made up quite a large proportion of earnings but only 13% of free cash flows. In general, cash flows are more important than earnings, so we are comfortable that the dividend will be sustainable going forward, especially with so much cash left over for reinvestment. Earnings per share is forecast to rise by 9.7% over the next year. If the dividend continues along recent trends, we estimate the payout ratio could reach 84%, which is on the higher side, but certainly still feasible. The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 3 years, which isn't that long in the grand scheme of things. The dividend has gone from an annual total of $0.08 in 2022 to the most recent total annual payment of $0.12. This implies that the company grew its distributions at a yearly rate of about 14% over that duration. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted. Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that Arko has grown earnings per share at 33% per year over the past five years. Fast growing earnings are great, but this can rarely be sustained without some reinvestment into the business, which Arko hasn't been doing. Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. The payments haven't been particularly stable and we don't see huge growth potential, but with the dividend well covered by cash flows it could prove to be reliable over the short term. We would be a touch cautious of relying on this stock primarily for the dividend income. Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 5 warning signs for Arko that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
