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(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — This is not complicated. When gasoline prices go to $3-$4 a gallon, the people who sell gasoline do 33% more in revenue. Not necessarily profit, but top line sales go higher. And in the case of Casey’s General Stores , this generates increased investor interest in owning the stock. I’m from Long Island. We have 7-Eleven. I don’t think I’ve ever been inside of a Casey’s. Thankfully, my research partner Sean has. One of the benefits of writing a column about the Best Stocks in the Market is that we identify names that probably wouldn’t be on our radar otherwise. Below is the story of one of them. Best Stock Spotlight: Casey’s General Stores, Inc. (CASY) Sean — Casey’s is a legitimate Midwest staple. Casey’s is a convenience store with 2,900 locations that has a decent in-house food operation. It’s essentially a quick service restaurant that happens to sell gas. This brand has a cult following, their breakfast pizza is literally bringing people (including myself, seriously, go try the breakfast pizza) to their stores with three out of four in-store transactions not involving fuel, which is rare for the convenience industry. Inside same-store sales were up 4% in their last reported quarter and up 8% on a two-year stacked basis. In fact, traffic within their stores were up enough to warrant adding labor hours back into stores to meet demand. Inside-store sales represent about 38% of revenue but 62% of gross profit due to lower margins on fuel sales. Their fueling business earns about 14%-15% in gross margin, which is about 41 cents a gallon, while the prepared food and dispensed beverages carry a 58% margin. Casey’s has seen a number of high-gas periods. Their management actually noted that higher fuel prices tend to be a positive for the business over a full cycle. The initial oil shock compresses margins as wholesale costs rise faster than retail prices, but the back end of the cycle more than compensates as retail prices are slower to fall. Using the Russia-Ukraine war as an example, Casey’s had a weak first quarter followed by three straight quarters of margin above the standard 40 cents a gallon. Management also noted they do not see in-store demand destruction until pump prices hit $5 a gallon, so we are right in the sweet spot, with the average price at $3.82 across the country. Pricing aside, shoppers are seeing value at a place with a strong sense of brand. A single topping pizza is $1-$2 less than the nearest pizza competitor, and breakfast can be had for under $5. Those are tough hurdles to beat in 2026. Casey’s is also growing. They plan on opening 80 net new stores in 2026, along with expectations of 8%-10% EBITDA growth annually. The goal has been to accomplish this type of growth in a durable way by combining same store sales, fuel profitability, and operation efficiency. Now here’s Josh on the technicals… Risk management Josh — What I like about this chart is how cleanly defined the exit is in case the overall market overwhelms what is clearly a bull run for Casey’s. The primary trend is still firmly up and this continues to act like a leader. Price is holding above a rising 50-day at $647 and well above the 200-day at $559, with the structure of higher highs and higher lows intact. The recent rejection near $700 looks more like digestion after a strong run than any kind of real damage, especially with RSI resetting back toward the low 50’s. For traders, as long as it’s holding the 50-day at $647, you stay with it and give it room to consolidate. For investors, nothing has changed, this is still a steady compounder above the 200-day at $559 with support layered in the low $600s. A controlled pullback into $600 to $620 that holds would be a healthy reset and could set up the next leg higher rather than signal a breakdown. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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