Tigress Financial: United Nautral Foods Is Best-Positioned To Win Organic Food Expansion

• Shares of United Natural Foods, Inc. UNFI have declined almost 34 percent in the past six months.
• Philip Van Deusen of Tigress Financial Partners has reiterated a Buy rating on the company.
• Van Deusen believes that the company is the best positioned to benefit from the ongoing “secular growth: in the natural/organic food segment.

According to the Tigress Financial report, “UNFI has laid the ground work to capitalize on future growth opportunities making substantial investments in its distribution centers along with its recent acquisitions of Tony’s Fine Foods.”

Van Deusen also believes that United Natural Foods has meaningful operating leverage and that the company would be able to sustain Economic Profit growth, while driving higher shareholder value.

The management expects organic growth to recover by more than 8.4 percent in the initial six weeks of FY16. This growth is expected to accelerate, driven by the company’s recent acquisitions and new distribution centers.

“UNFI’s new distribution centers are aimed at being able to deliver perishables to the perimeter of the store, helping expand the footprint of Tony’s Fine Foods,” the report stated.

“Having mainly a West Coast presence we see ample opportunity for UNFI to grow Tony’s Fine Food across the United States over the coming years and expect this to be a critical driver of Economic Profit as UNFI expands the brand eastward,” Van Deusen added.

Given the recent pullback in the stock, Van Deusen believes that the shares are undervalued at present and offer an attractive buying opportunity.