SAFEWAY STOCK VALUATION

Safeway Stock Valuation

Safeway Stock Valuation

Purpose of the Report

The purpose of this report is to provide comprehensive stock investment feasibility for Safeway Inc. (SWY). For the purpose, an in depth company and industry analyses are performed for the company. The report provides a short description of the major strengths, weaknesses, opportunities, and threats of the firm. Following SWOT, the paper provides the PESTEL and Competitive Forces Analyses of the company. The paper proceeds with the review of major financial strengths and weaknesses of the company using the available financial statements. The financial standing is measured in form of profitability, liquidity, marketability, and stock valuation ratios. The appendices at the bottom of this paper provide a complete view of these ratios. Finally, the paper provides recommendations as to stock investment in the company given its financial positions and market and industrial standing.

A Brief Description Of The Firm

Safeway Inc or Safeway is a private listed company whose stocks are listed in the New York Stock Exchange under the symbol SWY. It is an American based food and drug retailer. It is among the top five largest supermarket chain retailers in the North American territory, the ranking is based on its sales of around forty five billion US dollars for the year 2010 (Supermarket News, 2011). On the basis of the revenue generated in the year 2009, it was ranked at number eleven in the Largest American Retailers list (Stores, 2010). The company operates over seventeen hundred Safeway stores across the US and Canada (Safeway, 2011).

The Company has a strong network of supply chain partners that facilitates it manufacturing, processing and distribution facilities. Today company is operating under 14 unique brands in the markets (Safeway, 2011). Safeway is currently listed at number 52 in the Fortune 1000 companies list (one source, 2011).

An Analysis Of The Current Economic Situation

The current economic situation for a company can be comprehensively presented in light of a PESTEL analysis. The PESTEL analysis contains the analysis of Political, Economic, Social, Technological, Environmental and Legal environments of a country with reference to a particular object. The PESTEL analysis of Safeway Inc. is as follows:

Political

There are various restrictions imposed by the government of United States upon the corporate contributions in the political processes. It complies with all the rules that are imposed by the government when participating in the political activities. By participating in the political activities, the company tries to take part in the public policies that have a potential to affect the business procedures and the interest of the shareholders and employees.

Moreover, the company tries to be as much ethical as possible by keeping in accord with the standards and procedures of compliance with the rules and regulations. The political activities it is currently taking out includes engaging in public policy discussions, lobbying government agencies and officials, and participating in trade associations and other advocacy organizations. It has established its political action committee in order to carry out the above mentioned political ...