Mike Arnold
Long only, small-cap, tech, growth at reasonable price

Vitacost.com Is A Compelling Risk/Reward Before Earnings

Executive summary:

  • Vitacost.com (NASDAQ:VITC) ("Vitacost") is cheap both on an absolute and relative basis.
  • Certain activist investors are calling for the company to sell itself.
  • Vitacost reports full year 2013 results before the bell on Thursday, February 27, which could act as a positive catalyst to move the shares higher.


Vitacost is an online retailer of vitamins, minerals, health supplements, beauty products and natural foods. Vitacost carries over 40,000 SKUs across these product categories, as seen below.

(click to enlarge)

source: Vitacost investor presentation

At Vitacost's current $207 million valuation, the shares are providing for a particularly asymmetric investment given the low valuation (0.5x EV/sales) and recent insider shareholder activism calling for the sale of the company....

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