Whole Foods Market, Inc. (WFM), United Natural Foods, Inc. (UNFI): This Unknown Stock Will Profit From the Natural-Foods Craze

Page 1 of 2

Americans have realized the value of organic and natural foods, and they’ve rewarded well-known grocery giant Whole Foods Market, Inc. (NASDAQ:WFM) with huge share-price gains in recent years. But if you want to profit from trends like the natural-foods craze, you need to look beyond the obvious plays to discover other companies that are contributing to the industry’s success.

One such company is United Natural Foods, Inc. (NASDAQ:UNFI), which is slated to release its latest quarterly results on Tuesday. The stock has more than quadrupled since its 2009 lows, reflecting its success in capitalizing on the natural-foods trend. But will the company find new ways to grow? Let’s take an early look at what’s been happening with United Natural Foods over the past quarter and what we’re likely to see in its quarterly report.

Stats on United Natural Foods

Analyst EPS Estimate $0.64
Change From Year-Ago EPS 8.5%
Revenue Estimate $1.56 billion
Change From Year-Ago Revenue 12.3%
Earnings Beats in Past 4 Quarters 1

Source: Yahoo! Finance.

Can United Natural Foods keep cashing in on the organic-food movement?
United Natural Foods, Inc. (NASDAQ:UNFI) has produced strong double-digit sales growth recently, and analysts expect that trend to continue this quarter as well. Expectations for earnings have fallen somewhat in recent months, with Wall Street cutting earnings estimates for the April quarter by a penny per share and full-year estimates by $0.03 per share, but those small moves haven’t held back the stock. United Natural shares have risen more than 8% since the end of February.

Whole Foods Market, Inc. (NASDAQ:WFM)Most people don’t know much about United Natural, but as the main supplier to Whole Foods Market, Inc. (NASDAQ:WFM), the company commands an important place in the organic and natural foods industry. United Natural Foods, Inc. (NASDAQ:UNFI)maintains a huge nationwide distribution network that delivers natural and organic foods from The Hain Celestial Group, Inc. (NASDAQ:HAIN) and other major natural-foods producers to grocery stores around the country.

The major concern for United Natural is whether favorable trends in the U.S. economy can continue to give shoppers the financial means to pay higher prices for natural foods. Mainstream groceries Safeway Inc. (NYSE:SWY) and The Kroger Co. (NYSE:KR) have fought back against Whole Foods Market, Inc. (NASDAQ:WFM) by starting to emphasize organic and natural offerings in their own stores, representing a growth opportunity for United Natural Foods, Inc. (NASDAQ:UNFI), but their ability to continue doing so will depend on their customers being able to afford the higher prices that organic and natural food command.

Another key question for United Natural is whether food-distribution giant SYSCO Corporation (NYSE:SYY) will enter the natural-foods space more aggressively. So far, Sysco has been content with its commanding lead over the entire industry, leaving United Natural Foods, Inc. (NASDAQ:UNFI) to thrive in its niche. But if Sysco decides that the trend is worth pursuing for greater profits, it could pose a huge threat to United Natural’s growth.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!