Retail grocer Publix is not a publicly traded company. Instead, its stock is only available to employees or people directly involved in the operation of Publix. However, just like a publicly traded stock, the value of Publix stock is susceptible to various macroeconomic events and factors specific to how the chain operates. As the largest employee-owned company in the United States, Publix has one of the more unique models when it comes to large corporations.
If you live in Florida or many places in the southeastern United States, you are probably familiar with the omnipresent Publix stores. Publix is a supermarket chain that offers everything your standard red, white, and blue-birthed supermarket offers — food, pharmacy, various goods and services, and even small toys for pets to paw and gnaw on. Publix differs from many major U.S. corporations because Publix’s stock is only available to people working at or with Publix. Why is it this way and how does that affect the stock price? Let’s break it down below.
What affects Publix’s stock price?
Although Publix is not a publicly traded company, and retail investors cannot purchase shares, many of the same factors that affect other publicly traded supermarket conglomerates apply. On the macroeconomic side, changes in the market, as well as people’s shopping preferences, can affect the price of the stock Publix makes available to its employees. On the micro side, Publix’s growth potential, business management, and expansion can all affect the stock price.
Publix’s employee compensation roots
What’s interesting about Publix is that the company talks about giving back to its employees, and it actually walks the walk. This is rare as, in many cases, corporations will discuss how philanthropic they are, but in reality, their behavior dictates otherwise.
Publix was founded in 1930 by Greg Jenkins, a veteran of the infamous Piggly Wiggly chain, which was a fixture of the 1920s and one of the first supermarkets that would service customers en masse. In 1940, Jenkins mortgaged his orange grove to create Florida’s first supermarket, a single store.
Remember, in 1940, the U.S. was emerging from the Great Depression. Instead of turning the company public, Jenkins decided he wanted Publix stock to be available only to Publix employees and associates. Publix was to be customer oriented, a place where customers could find weekly savings on their grocery trips.
That dream came to fruition, and today, even though Publix is a large company, its stock and opportunity to invest are still only available to the “Publix Family.” They also take pride in their community involvement and various charitable causes. Publix is headquartered in Florida but has grocery stores all over the Southeast (Georgia, Alabama, South Carolina, etc.).
Factors that affect the value of Publix stock
Just like a publicly traded company, Publix’s stock price rises and falls based on a variety of factors, including the following issues.
Macroeconomic factors affect whole economies and, thus, their stock markets as well. For instance, a global war or an intense drop in employment will affect the stock price of Publix just like it will affect all stocks.
Trends in the market
Trends in the market can be more impactful than any price-to-earnings ratio or potential growth metrics. For example, as the NYSE and NASDAQ declined off the back of the financial crisis, Publix declined as well. Furthermore, e-commerce has had an effect on stores, says Kristina Schuler, VP of Investment Strategy and Lead Advisor for Paradiem. “I believe that retail chains are up against a challenge and may struggle a bit in the long term, especially considering the uptick in e-commerce,” she says. “However, I think that they will continue to exist but not in the same volume that we’re used to seeing. As an investment, this may cause the retail stocks to be a bit more volatile.”
Black swan events
Black swan events, or events that are completely unexpected that change the market, will also affect Publix’s stock price. For instance, the COVID crisis of 2020 sent markets spiraling down for a period of time. Likewise, a black swan event, such as contaminated meat produced in the U.S., could produce a chilling effect on supermarkets, and thus Publix’s stock price would indeed be affected.
Changes in customer behavior and technology
Changes in customer behavior can have a profound impact on the direction of an industry. For instance, online shopping has had a tremendous effect on retail outlets everywhere. It caused people to think twice about driving to a brick-and-mortar store when they could order groceries from the comfort of their homes.
Anything Publix does as a company could have a detrimental effect on its share price. For instance, if it turned out that bad meat was being sold at Publix, and it had caused people to get sick, then the bad press from that event could affect Publix’s stock price. They could decide to raise prices or offer employees better pay, and that could affect the stock price.
Earnings per share
Earnings per share can obviously affect how Publix does on the exchange. With a great earnings-per-share report, the stock price will go up; with a bad one, the stock price will go down.
A good growth story can keep a stock buoyant. Publix currently operates mainly in the southeastern United States, where it is very successful. If Publix is able to enter more markets, it will increase its overall size and potential for greater profits. This will, in turn, positively affect Publix’s stock price. Furthermore, Publix has started letting people order select products online, which will help them compete with other retailers.
How does Publix value its stock?
Obviously, as Publix isn’t publicly traded, there are not thousands of independent analysts analyzing the stock price. Likewise, it is not as susceptible to the supply-and-demand factors affecting many stocks. Instead, the company usually has an independent analyst compare the company’s financial results to the financial results of its competitors in the grocery chain/retail market.
If you’re looking to invest in major retailers or other stocks, these brokerages can point you in the right direction.
How to gain access to unlisted, privately owned stocks?
Private equity, which is equity that is not on the public exchanges, is the best way to gain access to non-publicly traded stock, says Jeff Ransdell, founder of Fuel Venture Capital.
“Private equity is becoming increasingly in demand by intelligent investors who now realize large institutions have been reaping the benefits of this asset class for the past 25 years, and only now are firms starting to provide access to these opportunities to private investors. So the best way to gain access to the best private equity managers is to be in the traffic. Be looking on social channels for firms that have a presence. Google search for managers providing thought leadership and who have a thesis you align with as an investor. Private equity is a very exclusive club, and the harder the VIP tables those managers can get you as an investor invited to, the more challenging it is to get accepted into their club. My advice is to do the research and find the managers you align with and then find someone who knows someone who knows us to get a private briefing.”
Why is Publix stock going down?
A variety of factors could contribute to Publix stock losing value, just like any other stock. The economy as a whole could be struggling, or the company could have had some bad press.
Is it worth it to buy Publix stock?
You cannot buy Publix stock as a retail investor. You would need to get exposure to it through other means, such as being an employee of Publix or an associate/board of directors. However, you can purchase stock related to the grocery industry, which can go up and down with more macroeconomic factors. Omar Khan of Boardwalk Wealth thinks that the grocery industry is due to split, in a way. Retail performance will be a “tale of two cities.” Brands providing essential or experiential products and services will thrive. Those who are “me-toos” will suffer. Investors should be less focused on the performance of the entire industry but instead should hone in on the opportunities within the overall industry. We typically go for broad-market exposure using ETFs like the S&P500 ETF. For specific company/industry exposure, we drill in on the fundamentals and especially future growth potential to come up with a valuation.
Can you keep Publix stock after you quit?
Yes, you can keep Publix stock after you quit. Most people who have worked for Publix will be in places like Florida, Georgia, Alabama, South Carolina, and other areas of the Southeast where the cost of living is relatively low, so your stock money could go a long way.
- Publix stock is not available to average retail investors. It is only available to employees and members of the “Publix Family.”
- Publix’s stock structure was a dream turned into reality by its founder George Jenkins.
- Publix’s stock price is affected by larger trends in the market and the industry, as well as the performance of the company itself.
- Publix’s stock is valued by independent analysts who look at the performance of other similar competitors in the industry and compare financial results.
View Article Sources
- Stock and Dividend Information – Publix Stock Holder
- Publix Reports First Quarter 2023 Results and Stock Price – Yahoo Finance
- Going Public: A Beginner’s Guide to Initial Public Offerings (IPOs) – SuperMoney
- Black Swan Event in the Stock Market: What It Is & Examples – SuperMoney
- Growth Investing: A Beginner’s Guide to Investing in High-Growth Companies – SuperMoney
- Understanding the Business Cycle: Guide to Economic Ups and Downs – SuperMoney
- Private Equity vs. Investment Banking: Top 3 Differences – SuperMoney
- A Beginner’s Guide to Shares: Investing in the Stock Market – SuperMoney