Natural Grocers by Vitamin Cottage Inc (NGVC): Five Things to Know About This Healthy Grocer

Valuation

Even after considering the growth expectations for Natural Grocers, this health food stock looks expensive. Natural Grocers has a forward P/E of 62 and a PEG ratio of 2.65. Whole Foods has a forward P/E of 32 and a PEG ratio of 2.07, while The Fresh Market has a forward P/E of 28 and a PEG ratio of 1.58. Whole Foods and the Fresh Market aren’t cheap either, but these stores look more attractively priced than Natural Grocers right now.

Takeaway

Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) has been a risky CAPS pick that paid off big. This health food store’s stock has gained 94.0% since July 30, 2012 while the S&P gained 19.2%. High insider ownership and the popularity of health food related stocks may help explain this rally. At the same time, Natural Grocers’ gross margin and valuation don’t look appealing right now. This health food store needs to achieve higher margins to look appealing at its current price.

The article Five Things to Know About This Healthy Grocer originally appeared on Fool.com and is written by Eric Novinson.

Eric Novinson owns shares of Whole Foods Market. The Motley Fool recommends The Fresh Market and Whole Foods Market. The Motley Fool owns shares of Whole Foods Market. Eric is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.