Kroger (KR) revealed today it is spending $800 million to snap up Midwestern grocer Roundy’s (RNDY). John Augustine, Chief Investment Officer at Huntington Trust, said this won’t be the last aggressive maneuvers from the supermarket giant as it battles both Walmart (WMT) and Whole Foods (WFM). ‘Roundy’s is going to help and we would suspect they are going to pick up some more to keep their earnings momentum going because they are doing a good with the utilization of those stores and square foot revenues,’ said Augustine. Kroger has seen its shares rise 15.5% so far this year, most of that appreciation coming at the start of the year. Augustine is also bullish on Marriott International (MAR), which has seen its stock drop slightly over 2% year-to-date. He said the hotel chain is being hit hard by the strong dollar, but the underlying business is fundamentally strong. ‘It’s a good valuation,’ said Augustine of the company’s PE multiple of 20 times 2016 earnings estimates. ‘We think, moving into next year as the consumers keep spending they are going to be a beneficiary of that and that’s why we like that stock.’ Amgen is flat year-to-date, but Augustine said it is a consistent performer in what has been a very volatile biotech space. ‘We want to be in the health care space and that company is one of the most balanced with respect to earnings growth,’ said Augustine, adding that the company is staying out of the spotlight as the country heads into a Presidential election next year.
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