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Hedge Fund Trade of the Week: Supervalu

Where’s the fast money finding opportunity? In this regular feature Anthony Scaramucci aka The Hedge reveals his latest greatest pick!

This week’s trade is long Supervalu , the company behind many neighborhood grocery stores including Albertsons, Shaw’s, Acme and more.

According to the company’s website, Supervalu’s mission is to “provide America’s neighborhoods with a superior grocery shopping experience enhanced by local expertise, national strength and a passion for our customers.”

Check out some of the company’s stats and its chart:

Supervalu (SVU)
Sector: Services
Industry: Retail (Grocery)
Based in: Eden Prairie, MN
Market Cap: $2.3 billion
52-week high: $17.47
52-week low: $7.06

Anthony Scaramucci selects this stock as his Hedge Fund Trade of the Week because its so unloved - dare we say hated - by investors. “This stock has been a disaster. It traded from $50 to $10 and is consistently on the 52-week low list,” he says.

Among the company's misteps, "they failed to cut prices in the declining economy and it caused shopper to go elsewhere," he says. "It's a classic value trap."

So why would Scaramucci recommend such a stinker?

Because he thinks the tide is about to turn. He cites the new management team led by Craig Herkert, who came to Supervalu from Walmart. According to Scaramucci, the new team is aggressively paying down debt the company incurred with its acquisition of Albertsons.

”This is a name that should catalyze with good management,” he says. And now they have it.

Also, he says, “It’s trading at 6 times earning; it's a low valuation stock. And it gives you a 3.3% dividend yield.” Two other reasons he finds it attractive.

And Scaramucci isn’t the only top hedgie who’s bullish. Appaloosa, Adage and Elm Ridge are all making similar bets.

Click here to check out other Hedge Fund Trade Of The Week posts

* Anthony Scaramucci runs SkyBridge Capital, a leading alternative asset manager with more than $7 billion under management. Every week on Fast Money, Scaramucci, aka 'The Hedge', takes you behind the hedges, giving you an unprecedented look at the names getting the most chatter amongst the hedge fund community.



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Trader disclosure: On April 12, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karabell owns (AAPL); Karabell owns (BIDU); Karabell owns (GOOG); Karabell owns (MRVL); Karabell owns (SINA); Finerman and Finerman's Firm own (AAPL); Finerman and Finerman's Firm own (BP); Finerman owns (C); Finerman and Finerman's Firm own (CVS); Finerman's Firm owns (HPQ); Finerman's Firm is short (IBM) calls; Finerman's Firm owns (JPM), is long (JPM) leaps; Finerman owns (JPM); Finerman and Finerman's firm owns (MSFT); Finerman's firm owns (TGT); Finerman owns (UNG); Finreman owns (USO); Finerman's Firm is short (IWM), (MDY), (SPY); Finerman's Firm is long S&P 500 puts; Finermna's Firm is long Russell 200 Puts; Terranova Owns (VRTS); Terranova Owns (JPM); Terranova Owns (V); Terranova Owns (BX); Terranova Owns (UPL); Terranova Owns (HOC); Terranova Owns (TCK); Terranova Owns (BAX); Terranova Owns (OXY); Terranova Owns (XOM); Terranova Owns (AKAM);

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