Xin He
Long/short equity, value, growth, contrarian

Why The Fresh Market May Get Cheap Enough To Lure Contrarians

Specialty grocery retailer The Fresh Market (NASDAQ:TFM) tumbled more than 19% on Friday last week after reporting disappointing third-quarter earnings and cutting its earnings guidance for full fiscal year 2013. TFM now expects earnings between $1.42 per share - $1.47 per share versus previous guidance $1.5 - $1.55 per share.

My first impression of this big drop was a "WOW." TFM has always been a nice company with very clear and strong business model. The grocery market is a brutal world with low profit margins and highly competitive environments. Given the high P/E ratio, TFM is providing investors good growth rate around 15%-20% per year. And of course, TFM's brand name occupies a significant amount of its market...

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