S&P 500 Snaps Up One of the Market’s Fastest‑Rising Stocks—Should You Buy It?

Casey’s General Stores (NASDAQ:CASY) is finally joining the S&P 500 club, and as one of the stealthiest low-tech growth stories out there, I think it’s about time to pay closer attention to the name, especially since it’s “working” in this kind of hyper-volatile environment. Whether it’s rising geopolitical risks or fatigue facing AI and tech stocks, sometimes it’s nice to rotate into a more defensive, less-hyped name that can continue growing strong, regardless of what the future holds for oil prices, AI monetization, or any other unpredictable macro factor.

Casey’s graduation to the S&P 500 is well-deserved, and it’s been a long time coming. The stock has steadily outpaced the rest of the market in the past 10 years, gaining close to 580%. More recently, shares have gone parabolic, with a nearly 137% gain enjoyed in the past two years.

In many ways, Casey’s General Stores is the ultimate anti-AI stock, and it’s been a way to achieve AI-esque kinds of returns in recent years. As is the case with any parabolic mover (the stock chart of Casey’s is a textbook parabolic function at least as of the time of this writing), the big question is whether the overbought conditions will pave the way for a steep pullback or if the gains can continue for a while longer.

The Casey’s growth formula is still working well

There’s no doubt that Casey’s growth formula has worked wonders in the past decade, and while it’s still very much in play, the company is starting to get quite large now. The $27.5 billion market cap means the convenience retailer is no longer a mid-cap gem. It’s large enough for the S&P 500, and it’s also sizable enough for large-cap investors to take more notice. Any way you look at it, the latest news of induction into the S&P 500 has added more fuel to the rally.

The stock is now up over 18% in the past month. And while the valuation is getting out of hand at 42.5 times trailing price-to-earnings (P/E), I still think there’s more gas left in the tank of the popular fuel-up destination. As the ultimate “boring” play that’s become a play to jump to the pump while getting some pretty excellent pizza (and other goods), the jump into the S&P 500, I think, couldn’t have come at a better time.

As funds scoop up the shares at a high now that they’re one of the S&P 500, I do think that a path to $1,000 per share over the next couple of years is set. What’s most remarkable about the convenience retailer, though, isn’t that it’s a rare defensive grower; it’s that management has shown a willingness to step outside of its comfort zone with its food push.

A stealthy restaurant play

As it turns out, pizzas are a sales- and margin-booster. And as the firm looks to become more of a take-out restaurant rather than a gas station and convenience store, I do think that there’s still a lot of quick-serve restaurant share to take.

Beyond pizza, the company is looking to make a deeper dive into saucy chicken wings. As it tests out wings and other intriguing food items, I do think there’s room to shift the mix even further towards food. At a time when oil prices could stay elevated, sometimes it’s the delicious food that makes the pain at the pump worthwhile. In any case, Casey’s General Stores is a premier convenience retail operator that’s also becoming more of a stealth fast-food play.

Of course, the multiple is becoming stretched, and Casey’s is no longer a $5 billion company. It’s harder to double up when you climb up the market cap rankings. But, ultimately, I think Casey’s is a growth story that will continue to work for years to come. The S&P inclusion spike might be overdone, so I would wait for a cooling-off period before considering jumping into the name.