Stock Spotlight: McColl's Minnow Supermarket has just revived the Safeway brand
City & Finance reporter for the Daily Mail
McColls has more than 1,600 convenience stores and newsagents across the UK
Who is it? McColls – a relative minnow in the food retail world – has more than 1,600 convenience stores and newsagents across the UK.
It operates under the names McColl, Martin and RS McColl and has recently revitalized the Safeway brand.
what's new? Over the summer, £ 150 million was wiped off its market value after CEO Jonathan Miller described an "unprecedented disruption".
One of its major distributors collapsed last year, resulting in a profit despite rising sales.
Who supports this? Klarus Capital is the largest shareholder. Aberforth Partners, a company that invests in companies that it believes are undervalued, has a significant stake – as does activist-investor Laxey Partners, which tends to push companies to make improvements.
Other well-known fund managers are also among the ten largest investors, including Miton, Chelverton, Fidelity and Legal & General.
Why should you invest? David Jones, chief market strategist for online trader capital, points out that investors' pessimism may have been exaggerated and a turnaround is impending.
The new Safeway brand has done well and the company has become a good dividend payer.
… and why should not you The obvious risk comes from the big supermarkets.
"If Sainsburys and Tesco decide to expand their smaller stores, it will hurt McColls," Jones says.
"And, as is usual, there is a continuing threat that Amazon is still invading this area – but even the US giant can not beat the convenience of having the forgotten pint of milk around the corner."