If you took a driving trip through the Midwest during the summer, chances are you, and several hundred thousand others, stopped at one of almost 1400 Casey's General Stores Inc. (NASDAQ: CASY) to refuel both car and driver. On Sept. 5 Casey's reported record earnings for 1Q FY 2008, which ended on 31 July, and did it through real growth in both sales and income. Casey's, despite having a goal of acquiring 50 new locations by the end of the year, actually acquired none during the quarter. Casey's has its priorities in the right order in terms of cost control. Senior management does not let operating expenses increase by any percentage amount greater than the percentage increase in gross profits.

Total sales of both gasoline and food were up 17% to $1.3 billion. Most of this amount came from increases in food and beverage sales, which were up 15% to $260 million for packaged food items and cigarettes and $75 million for fresh pizza and sodas.

Oddly, gasoline sales were up imperceptibly, not even half a percent, in terms of volume. But as many of us have suspected, the profit margin on gasoline has increased, in this case to 15.8 cents per gallon, compared to 9.8 cents per gallon in the summer of 2006. Casey's is still expanding its presence throughout the nine state Midwest region. Casey's continued to show strong sales during August as well, with gasoline sales up 1% but food, groceries and general merchandise up almost 12% in same store sales. Clearly, Casey's has the right product mix at the right prices for tis customers. Casey's recently announced a quarterly dividend of $0.065 per share. The stock currently trades just under $29.00, and seems a good bet to appreciate in price without much downside risk.