Take Profits on UNFI Stock?


The largest position in my portfolio UNFI $UNFI gained 13% after great earnings. The stock lost some of the gains but that's normal. UNFI stock gained over 800% since March 2020. Is it time to take profits?


I bought UNFI as it was the largest wholesale distributor with a moat in organic and natural foods. The market was overreacting to the debt they took to acquire Supervalu and the possibility of them losing their largest customer, Whole Foods $AMZN . The contract with Amazon has been renewed till 2027 and there are now many tailwinds on UNFI such as inflation.


Revenues were up 4.7% YoY and Adjusted EBITDA up 19% YoY. It is to be noted that UNFI increased its debt temporarily to deal with increasing demand for the holidays. However, the company expects that debt will be reduced by $100-$150 million for the FY22.


The effects of inflation on the company are yet to be seen as they are still facing issues with the supply chain. However, if inflation remains high for the long-term, this is going to be a tailwind for UNFI.


I will say that UNFI is fairly valued. For the time being, I will just hold on the stock.


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