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Analysts and experts believe that food retailers have developed strategies focusing on differentiating themselves from competitors through diverse products and services rather than low prices. The low prices is going to hurt the industry and make it unsustainable for most. By providing niche products and services food retailers have avoided a price war. As a result of these strategies, analysts believe traditional grocery chains will be gain sizable market share, with average comparable store sales growth of 5-6% in the fiscal year 2007.

Remodeling Existing Stores
Improving sales trends will continue to reflect food retailers’ progress in differentiating store offerings from those of low-price competitors. Most food retailers will focus on remodeling their existing stores, rather than opening new ones. This will help ease the air of competition, and enable the industry stay focused.

Labor Union Contracts
With newly renegotiated labor union contracts and improved sales growth will help the industry offset more competitive pricing and increased promotional activity. This would help the industry gain healthy margins. Newly renegotiated labor contracts should also help control wage and health care expenses.

In addition, consolidation could ease competitive pricing pressures in some markets, as well as improve operating profitability over the intermediate term for active participants, by further leveraging overhead expenses over a greater number of stores. However, risks remain high as differentiation strategies are rolled out, and margin pressures may result as pricing competition remains intense in some markets.

S&P Food Retail Index
Year to date through June, the S&P Food Retail Index increased 13.0% compared to a 6.8% rise in the S&P 1500 Composite Index. In 2006, the sub-industry index rose 15.2% versus a 13.3% increase in the S&P 1500. Out-performance in 2007 reflects improved comparable store sales trends due to food retailers shifting operational strategies, which we think are becoming increasingly focused on differentiation through product and service offerings rather than low prices.

Keep An Eye
Few companies that fall in this sector are

WFMI – Whole Foods Market, Inc. engage in the ownership and operation of natural and organic foods supermarkets. It offers produce, seafood, grocery, meat and poultry, bakery, prepared foods and catering, specialty (beer, wine, and cheese), whole body, floral, pet products, and household products. The company operates 171 stores in US; 3 stores in Canada; and 7 stores in the UK.

OATS – Wild Oats Markets, Inc. operates a natural foods supermarket chain in North America. The company operates 110 natural foods stores. It offers natural, organic, and gourmet foods, such as dry grocery, meat, poultry, seafood, dairy, frozen, bakery, and prepared foods; environmentally-friendly household products; natural vitamins, supplements, and herbal and homeopathic remedies; and body care products.

IMKTA – Ingles Markets, Inc. operates a supermarket chain in the southeast United States. It provides food products, including grocery, meat and dairy products, produce, frozen foods, and other perishables; and non-food products, such as health and beauty care products and general merchandise, as well as private label items. The company also offers various products through the development of book sections, media centers, floral departments, coffee kiosks, certified organic products, bakery departments, and prepared foods, as well as operates fuel centers and pharmacies at select store locations. The company operated 46 pharmacies and 36 fuel stations. In addition, Ingles Markets operates fluid dairy processing and shopping center rentals businesses. It operates 197 supermarkets, as well as 74 neighborhood shopping centers.

RDK – Ruddick Corporation operates a chain of supermarkets in the US. Its supermarkets offer groceries, produce, meat and seafood, delicatessen items, bakery items, and wines, as well as nonfood items, such as health and beauty care, floral, and pharmacies. The company operates 152 supermarkets. It also manufactures and distributes industrial sewing thread, embroidery thread, and technical textiles to manufacturers of apparel, automotive materials, home furnishings, medical supplies, and footwear.

WMK – Weis Markets, Inc. engages in the retail sale of food. Its retail stores sell groceries, dairy products, frozen foods, meats, seafood, fresh produce, floral, prescriptions, deli/bakery products, prepared foods, fuel, and general merchandise items, such as health and beauty care, and household products. The company also offers services, such as third parties providing in-store banks, laundry services, and take-out restaurants. It operates 156 retail food stores.

PTMK – Pathmark Stores, Inc. operates a chain of supermarkets. The company operates 141 stores. It offers an assortment of foods and general merchandise, as well as in-store pharmacies and in-store banks.

During the bull market, everyone is happy. More and more companies get listed and start raking in the money. However when the bull market stalls, some companies crash to rock bottom and could be pushed towards getting delisted. Investing in companies that are delisted can be extremely risky. Lets find out how and why delisting occurs and what does that mean for both the company being delisted as well as the investors that hold the company stock.

Getting Listed On An Exchange
Most tech companies try to get listed on the Nasdaq. To get listed on Nasdaq, a company must meet the minimum standards required. For example, the company must pay a $5,000 application fee before its stock can even be considered for listing, and it can expect to pay at least $100,000 in listing fees if successful. The company must have at least 1.1 million public shares outstanding worth a total of at least $8 million and a share price of at least $5 per share. There are numerous other rules that apply, but until a company reaches these minimum thresholds, it has no chance of being listed on the Nasdaq. Nasdaq puts these restrictions on companies so that only those with a respectable business model and corporate structure can make it, limiting investor risk.

To Stay Listed On An Exchange
Companies can make it to the exchange, but they still need to maintain certain standards set by the exchange to stay listed. These exchanges charge a maintenance fee to keep a close watch on the listed companies. This is beneficial to investors, especially beginners because these standards serve as a safety net that any company listed on the exchange is definitely credible no matter when they were listed. Minimum standards the company should maintain however may vary depending on the exchange. For example on Nasdaq the company must maintain 750,000 public shares outstanding worth at least $5 million. Anything less could result in a delisting from the Nasdaq.

Getting Delisted On An Exchange
As mentioned earlier the rules of getting delisted may vary depending on the exchange. On Nasdaq when a company trades for 30 trading days below the minimum stock price or market cap could lead to getting delisted. At this point Nasdaq will inform the company that it has 90 days to get back on track. The minimum stock price of $1 and a market cap of atleast $5 million should be meet to not being delisted. On few occasions the exchange makes an exception.

What Delisting Means For The Company
Once the company is delisted it is not the end of the world for them. It also doesn’t mean they are going bankrupt. It just means that they are not doing well at present. However that is no indication of their future. It is possible for a company to be delisted and still be profitable. However, delisting can make it more difficult for a company to raise money, and it sometimes is a first step towards bankruptcy. Delisting may trigger a company’s creditors to call in loans, or its credit rating might be further downgraded, increasing its interest expenses and potentially even pushing it into the red.

However after delisting the company stock can still trade at two places.

1. Over the Counter Bulletin Board (OTCBB): Electronic trading service with very little regulation. The companies should atleast have their financial statements current.
2. Pink Sheets: A quotation service. The companies do not require to register with SEC. The companies should not need require to have financial statements current. These are more riskier.

How Does It Affect Investors
Experts recommend that investors who have invested in delisted company should seriously consider selling off their position and cut off their losses. A company delisted from an exchange is very likely to go through a rough patch. The morale of the company drops and so does their trust factor. Additionally many institutional investors are restricted from researching and buying delisted stocks. Investors get directly affected since their portfolio will take a hit. With no research from institutional investors, it also becomes hard to predict the future of the company. With dropping prices its also possible that investors will be forced by their broker to liquidate their positions.

Conclusion: Opponents of delisting argue that it is too harsh to punish a company that could still recover. Supporters of delisting argue that allowing such a company to stay listed would degrade the caliber of companies that maintain certain standards. For now the supporters of delisting are winning. Delisting could make the stock drop even furthur making it a very risky trade. Investors who own delisted stocks or are planning to invest in delisted stocks should proceed with caution. Understand all the risk factors before trading such stocks.

Penny stock is a stock that trades at a relatively low price and market cap. Penny stocks are generally attractive to retail investors who want to make a quick buck. A 10 cent increase on a stock worth $1 is equivalent to 10% returns. A 10 cent increase on a stock worth $10 is equivalent to only 1% returns. A small increment in a penny stock can yield high returns. This makes it really attractive to many investors. However even a 10 cent drop can reduce retail investors investment drastically. Therefore penny stocks should be traded with caution.

Diversify
It is alrite to buy penny stocks at low prices and then eventually sell it off at high prices, provided you thoroughly understand the company’s business model and financial statements. It is advisable to diversify your penny stock portfolio to spread your money.

4 Reasons To Sell Your Penny Stock
There will be times when you might want to sell your stock for only a small profit or no profit at all. Bad news of almost any sort can drive a stocks price down very quickly. This is why it’s important to follow your stocks very closely. Lets find out some reasons you should sell off your position in penny stocks.

• Reverse Stock Split: If the company announces a reverse stock split, experts suggest that you get out and sit on the sidelines awhile before considering getting back in. Many companies do this to raise the price of the stock. They issue fewer shares that are worth more money per share, but the price usually falls.
• Equity Offering: Another thing to be on the lookout for is the possibility of a company raising cash through an equity offering. If the company needs more working capital it will issue more shares to sell to the public. This will dilute the share value and most times the stock price falls.
• Increased Inventory: If the company starts showing large increases of it’s product inventory you should start thinking about selling your shares. This is a sure sign of coming trouble. When sales are down inventories go up. Big inventories also create additional expenses for the company.
• Bad Merger: If you find out that another company has made an offer to buy your company’s stock at a lower price then get out. The company that made the offer must think that the lower price is the true value. If your company accepts then they must also think that it’s only worth that much. Get out.