Long/short equity, value, special situations, growth

United Natural Foods: Delivering Organic Foods & Growth

There are three ways to invest in the organic/natural foods trend: [i] producers of organic foods (Hain, Annie's, Boulder Brands, WhiteWave), [ii] organic-oriented supermarkets (Whole Foods, etc.), or [iii] United Natural Foods (NASDAQ:UNFI) the distributor that acts as the middleman between the producers and the supermarkets. I am bullish on the long-term potential for organic products, which should drive growth at all three levels of the industry. However, after a big rally in the stock price, United Natural Foods is trading at a premium valuation. In this article I will analyze the company and its valuation to understand the potential for further stock price gains.

Company Overview

United Natural Foods was formed in 1996 when two distributors (with...

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