Fresh look at The Fresh Market


The Fresh Market (TFM +2.2%) is upgraded by Northcoast to a Buy rating from Neutral.

The call cuts against the grain of the Street which has been leaning to the bearish side (Morgan Stanley, Goldman Sachs, Sterne Agree) on the specialty grocery store operator.

Northcoast thinks shares of TFM were oversold and sees positive fundamental factors.

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Comments (8)
  • 6034700
    , contributor
    Comments (1929) | Send Message
     
    I just visited the store in Bedford, NH, and I was impressed with the changes made.

     

    I am reversing my bearish call to short the stock.
    15 Jul 2014, 09:55 AM Reply Like
  • Brian Sanders
    , contributor
    Comments (1380) | Send Message
     
    are you going long or just avoiding the stock all together?
    15 Jul 2014, 02:50 PM Reply Like
  • David Greene
    , contributor
    Comments (141) | Send Message
     
    Specialty retailers like TFM are going to differentiate themselves from the mass grocery retailers by emphasizing a broad selection of organic AND non-GMO food and produce.

     

    I discussed this in a recent Seeking Alpha article:

     

    Digesting the GMO Food Controversy and What It Means for Your Investment Portfolio

     

    http://seekingalpha.co...
    15 Jul 2014, 09:21 PM Reply Like
  • 6034700
    , contributor
    Comments (1929) | Send Message
     
    Brian Sanders, I have not taken a long position at this time. I am watching the way the stock trades and this may guide me to purchase shares.

     

    The improvement to the store was dramatic but I am still not impressed by the staff working in the store but I did not have the time to gauge this properly. Even if I am correct about the staff someone has done something right with the products and their presentation. I also found the prices reasonable and the products that some may consider expensive are worth the price difference.

     

    I regret that the next time I will be able to visit the store will be the last week of August so I will have to get my information from other sources looking at other stores and the way the stock behaves,
    16 Jul 2014, 09:31 AM Reply Like
  • Brian Sanders
    , contributor
    Comments (1380) | Send Message
     
    Okay fair enough. I happen to be long TFM, avged at $32. And speaking without an unbiased tone...I think that TFM has a better store layout and decent competitive pricing versus WFM. However WFM likely has at least 1.5x the amount of customer traffic. Both seem to be good companies, it just comes down to valuation in my opinion.

     

    Poor technicals and weak sentiment combined appear to weigh down the stock heavily. Short interest is now at ~30%.

     

    Thanks for the reply.
    16 Jul 2014, 11:04 PM Reply Like
  • capappman
    , contributor
    Comments (24) | Send Message
     
    Non-GMO is a huge growing market and industry, and a number of new micro-cap companies are starting to get traction into the serious market, e.g. Verity Corp. (OTCQB:VRTY)
    16 Jul 2014, 12:07 PM Reply Like
  • David Greene
    , contributor
    Comments (141) | Send Message
     
    There are really no "pure plays" in the public markets for companies that focus on non-GMO food production. Verity Corp is the only one I could find. This article in Organic and Non-GMO Report was helpful:

     

    http://bit.ly/1pdZp8K

     

    The whole point of my article is that the cross currents associated with the non-GMO controversy will effect the specialty grocery retailers like TFM and WFM, the seed companies like Monsanto, and small companies like Verity that work with farmers
    17 Jul 2014, 10:08 AM Reply Like
  • 6034700
    , contributor
    Comments (1929) | Send Message
     
    Brian Saunders; I am not thinking of going long TFM because I have a lot of better stocks to place my money and if I am correct about what I saw at one of the stores it will still take time for these changes to work out and for the customers to come. I only wished to say that it is not a short anymore.
    17 Jul 2014, 09:22 AM Reply Like
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