Jingo jingles for Ingles.

• Position: Ingles Markets - On the market - Column

Jingo jingles for Ingles

Advertisements for Ingles Markets play up its all-American ownership.

Ingles, of course, is trying to capitalize on the fact that two of its competitors in the Carolinas, Salisbury-based Food Lion and Greenville, S.C.-based Bi-Lo, are in large part owned by Europeans.

Do shoppers care?

Asheville-based Ingles (IMKTA-NASDAQ) seems to think they do. Chairman and founder Robert P. Ingle, who still maintains tight control, is betting on it.

But consumers may not care who owns what as long as they get the best deal. Right now, with Food Lion and Bi-Lo carving up market share all over the Carolinas, it's slim pickings for Ingles.

That helps explain why Ingles' solid but less-than-dazzling performance has left investors yawning since the company first went public at $13 a share in 1987. From a high of $13.38 at the end of 1987, the stock has sagged to around $9.

That's low enough to trigger buy signals from a number of analysts, not so much because Ingles is a dynamite grocery chain but because they see it as just about the cheapest grocery stock around.

"The company's way undervalued," notes Mun Yee Chan, who follows Ingles for Gruntal & Co. in New York. "The stock is way below what it should be in terms of P/E multiples and cash flow. I've still got it on my buy list because it just doesn't get the recognition it deserves in the marketplace."

At $9, Ingles is trading at 10 times projected 1990 earnings of 90 cents a share. That's way below highflying Food Lion (25 times earnings) or even mediocre Winn-Dixie (14 times). For bargains, you can't find better. But there are a few things about Ingles you need to understand.

The company is controlled by Ingle, who started with one store and $20,000 in 1963 and built the company into a 156-store chain that generated $903 million in fiscal 1989. After the 1987 offering, Ingle still holds nearly three-quarters of Ingles' Class B stock, where voting rights are concentrated. Only Class A stock is offered to the public.

Ingle clearly calls the shots, and this is interpreted as good and bad. Chan faults Ingle for not promoting the stock to investors. "The chairman is a nickel-and-dime person," he says. "He'll do a roadshow when he wants to offer more securities, but when investors ask him to do something to market the stock, he refuses to spend the money."

But Ingle's personal involvement brings to Ingles Markets an unusual real-estate division. The company manages 61 neighborhood...