By RICK KRON
Leader staff writer
It was between Microsoft and Kroger, said fifth-grader Granger Pearson, when deciding which company to write about for the national InvestWrite contest.
He went with Kroger, and it paid off as the Warren Dupree student was named the third best financial writer in the nation and the state’s top writer.
“This is a really big deal—over 9,000 students wrote essays this past Spring,” said Jessica B. Bayer, InvestWrite’s national program manager.
It is the second year in a row that Warren Dupree has had a student finish third in the country and tops in the state.
And Pearson remembers the assembly he went to as a fourth grader and saw that other student, MaShala Pugh, win a laptop, $200, a trophy and more for her third place effort.
“It got me thinking that I needed to finish first, second or at least third when I got the chance to write,” he said.
He had two chances this year, writing about Microsft in the fall, his essay was one of 10 from the school good enough to make it to the national level, but alas, no winners.
When the spring contest came around, he thought about Microsoft again. “It’s a really good company, but its focus is only on technology. Kroger, however, provides the basic needs that everyone needs. Without the needs taken care of its kind of hard to focus on technology,” Pearson said
The national prompt for the elementary division was: “Choose a company from your portfolio or a publicly traded company that interests you and that you think is a good long term investment. Describe why you selected the company and state if it was included in your Stock Market Game portfolio. Who are your company’s competitors? Compared to its competitors, is yours an old company or a new company? How does your chosen company compete with other companies? Discuss why you think it is a better long-term investment than its competitors.”
Students had to also cite their references, and the essay had to be between 300 and 800 words.
The fifth grader, who is a gifted-and-talented student who loves graphic arts and coding, said in his research, there wasn’t a lot of good background information about Kroger or how it deals with competitors – the crux of the spring essays – and he had to visit lots of websites and do a lot of reading. “But I luckily like reading, mostly factual or realistic fiction,” he said. During his research Pearson became intrigued by the founder of the company, Barney Kroger, who believed in his idea so completely that he invested everything he had.
What impressed Pearson about Kroger is that not only was it beating the stock market average, but it was also beating Whole Foods, Walmart and Target.
He also acknowledged that even though he loves writing he had no idea that he was going to have to rewrite, rewrite and rewrite the essay to get it good enough to go to New York. “I think I wrote it at least five times,” Pearson said.
He found out he had placed third in the nation at his fifth grade’s Rite of Passage ceremony last week.
“All of us who had our essays submitted to New York were told to stand up and then we were told that one of us was a national finalist and then my name was announced. It was a total surprise.”
The school and Economics Arkansas, the nonprofit group that oversees the Stock Market Game and the InvestWrite program on the state level, didn’t get word that Pearson had won until almost the last week of school. So Pearson will be awarded his laptop and some other prizes that weren’t ready for the school ceremony at the next Jacksonville-North Pulaski School District board meeting, at 6:30 p.m. June 6 at city hall.
He did get his cash award at the school gathering. “I haven’t spent any of it yet. I’m weighing my options.” He doesn’t know if he’ll invest it, but he definitely wants to do some when he’s older. “Investing is a good idea,” he said.
Once an essay was judged good enough at the school level and forwarded to the national InvestWrite competition they were scored by four additional judges who are members of the securities industry. Essays were scored in three categories: understanding the subject matter, rationale and writing style.
PEARSON'S ESSAY
Now $372 may not seem like much to a lot of people, but to Barney Kroger and me it’s a life’s savings. Barney used his $372 in 1883 to open a grocery store in downtown Cincinnati. He ran his business with a simple motto: “Be particular. Never sell anything you would not want yourself.”
A pretty good philosophy as it has taken Barney’s one store and turned it into a conglomerate known as The Kroger Co. With more than 2,700 stores in 35 states under two dozen banners and annual sales of more than $109.8 billion, Kroger today ranks as one of the world’s largest retailers.
Besides the food, beauty supplies, medicine, clothes and just about everything one would need, Kroger is the “grocer” stock to invest in! I would have to say that Kroger is your best shot to fill your cart with green. Yes, it has competitors, but it sure beats them out through mergers, innovations and customer loyalty.
According to Yahoo! Finance, Kroger is selling for about $38 per share, has a PEG (profit-to-earnings growth rate) of 1.69 and an MR (mean recommendation) of 1.8. Now, an MR is an average of what the financial experts thinks, and the closer it is to one, the more they agree it’s a stock to buy, and Kroger is right there. Also looking back at its five-year growth chart, Kroger’s stock price has more than tripled!
Why is Kroger a winning stock? First, its prices are very low. Especially for having 50,000 items, that’s amazing! That’s what helps give Kroger such a good rating in the financial community. Kroger has an A+ rating from thestreet.com and is number one on the list of the “10 Best Super Market Stocks of 2016.” Whole Foods has a B- and Safeway, Publix and Walmart didn’t even make the list! Also, Louis Navelier with Investor Place said Kroger is turning into the Apple of grocery stores. That could be a play on words (Kroger – Apple, grocery store – fruit), but no matter it is a very astute observation.
Mergers have played a key role in Kroger’s growth over the years. In 1983, Kroger merged with Dillon Companies Inc. to become a coast-to-coast operator. In a $13 billion deal in 1999, it teamed up with Fred Meyer, Inc. and that created a supermarket chain with broad geographic coverage. Then two years ago Kroger finalized its merger with Harris Teeter stores and Vitacost.com.
When it comes to innovation, Kroger has been a pioneer. In the 1930s Kroger was the first to routinely monitor product quality and scientifically test foods. In 1972, it became the first grocery retailer in America to test an electronic scanner.
Kroger recently pioneered QueVision, that has reduced the time customers wait in line to check out from four minutes in 2010 to less than 30 seconds today. Also, the company was the first grocer to formalize consumer research, interviewing 4,000 shoppers the first year. In 2014, it listened to 9,661,855 customers. Not long ago Kroger created a process to rescue safe, edible fresh products and donate them quickly to local food banks. Others have followed Kroger’s lead.
Let’s take a look at one of Kroger’s competitors: Safeway. To begin with, it operates 1,331 stores. Recently, shareholders approved a deal to be acquired by privately held Albertsons. The combined company will have close to 2,400 stores. Sounds good, but remember Kroger has 2,700 stores. Last year, Safeway had net revenues of around $36 billion. Kroger tripled that!
And then there is Whole Foods which has a lot of items but they have one problem. Their prices are higher than Kroger, because most of it is organic, but Kroger is carrying organic foods, yet at better prices. While the S&P 500 continues to flounder at a loss of more than 3 percent year to date, Kroger is up a whopping 15, beating Walmart, Target, and Whole Foods.
The key statistic on Kroger is that it just completed its 10th consecutive year of grabbing share from competitors. In fact, Walmart lost ground to Kroger in every major market last year. According to a report just released by ADS Insights, Kroger shares are poised for a surge that would lift the stock nearly 20 percent in the next year, meaning the price could hit $45 within the year.
Barney invested his life savings in the idea of Kroger and I think I’ll do the same with my $372.
