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Bull of the Day: SpartanNash (SPTN)

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With everybody hunkering down at home nowadays, on quarantine while COVID-19 rages, there’s been a shift in consumer spending habits. Rather than spending money on fancy trips and nights out on the town, most people are using the lion’s share of their budgets at the grocery store. That’s helping to provide a solid tailwind for businesses surrounding grocery stores. Today’s Bull of the Day is in the food distribution business, benefiting directly from this new trend.

Today’s Bull of the Day is Zacks Rank #1 (Strong Buy) SpartanNash (SPTN - Free Report) . SpartanNash Company distributes and retails grocery products. It operates in three segments: Food Distribution, Military, and Retail. The Food Distribution segment offers approximately 52,000 stock-keeping units. The Military segment sells and distributes grocery products to military commissaries and exchanges located in 39 states across the United States and the District of Columbia, Europe, Cuba, Puerto Rico, Honduras, Bahrain, Djibouti, and Egypt.

The reason for the favorable Zacks Rank is the recent bullishness coming from analysts. Over the last sixty days, analysts have increased estimates for the current quarter and current year. The bullish activity has pushed up the current quarter Zacks Consensus Estimate from 22 cents to 38 cents. Current year consensus is up from $1.23 to $1.39. If earnings hit the mark, that would represent 58% year-over-ear EPS growth for the current quarter and 26% growth for the current year.

This positive earnings trend is new for shares of SPTN. This is a stock which struggled as EPS estimates were subdued from early 2017 through mid-2019. The downward trend in EPS estimates pushed the stock down from highs near $40 to lows under $10. While price trends can reverse on a dime, earnings trends take much longer to develop. The new, positive trend began earlier this year. Now that earnings have bottomed out and turned to the upside, it looks like there is a good chance SpartanNash can continue its run off the lows.

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