Egan-Jones Proxy Services recommends that Class A shareholders of Ingles Markets Inc. (NASDAQ: IMKTA) vote for activist nominee Rory A. Held and withhold votes from management nominees Rebekah Lowe and Dwight Jacobs, according to a statement from the proxy advisory firm.

The recommendation centers on concerns about capital allocation at the grocery chain. Egan-Jones states that Ingles Markets deployed approximately $1.5 billion in capital expenditures over the past decade while generating minimal improvement in operating income. The company reduced its store count from 201 to 194 stores and has not opened new locations in the past four fiscal years.

Ingles Markets ended fiscal 2025 with approximately $366 million in cash and short-term investments, while debt decreased from approximately $632 million in fiscal 2021 to approximately $544 million in fiscal 2025. The company has maintained its Class A dividend at current levels throughout this period.

The proxy adviser notes that Ingles Markets owns 29 undeveloped locations not generating rental income. Summer Road estimates the company holds roughly 1,800 acres of undeveloped real estate valued by county tax assessors at approximately $466 million.

Egan-Jones reports that free cash flow has declined and margins have deteriorated at the company. The stock trades at approximately book value, according to the analysis.

The proxy fight represents an effort to change board composition at Ingles Markets, with the activist investor seeking representation to evaluate options for capital deployment and shareholder returns.