Austin Mading
Long/short equity, bonds

Why Vitamin Shoppe Is Not Healthy For Your Portfolio

It's no secret that the Vitamin, Mineral and Supplement industry has thrived during the recession and on through the aftermath. The aging U.S. population and rising healthcare costs have helped contribute to an increasing focus on diet and nutrition. Vitamin Shoppe (NYSE:VSI), has benefited as of late from the current trend. Despite this, however, I believe that the company is a great short candidate based on the following factors:

  • Decrease in comps growth with lower inventory turnover
  • No economic moat to gain separation from the increasing competition
  • The company is trading at a 29% premium

Stores are Becoming Less Efficient

Comps have been increasing annually, for the most part, since 2008 into 2012. As you can see from...

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