
UNFI Stock Analysis
๐ธ I have a lot of cash and cash equivalents in my portfolio right now following my big GameStop $GME profits and as I said, I'll be making new investments as I find them. I'm not rushing anything. I finally found a new stock to invest in, United Natural Foods $UNFI . This ๐จ๐ฉ๐ค๐๐ ๐๐จ ๐๐ค๐ฌ๐ฃ ๐๐ฎ ๐ฎ๐ฌ% over the past 5 years while the S&P 500 $SPX500 gained 111%.
๐ UNFI is the ๐๐๐ง๐๐๐จ๐ฉ ๐ฌ๐๐ค๐ก๐๐จ๐๐ก๐ ๐๐๐จ๐ฉ๐ง๐๐๐ช๐ฉ๐ค๐ง ๐๐ฃ ๐ฉ๐๐ ๐๐ and Canada with over 60 distribution centers. UNFI distributes over 275,000 natural, organic and conventional products to more than 30,000 customers including natural product superstores, independent retailers,conventional supermarket chains, ecommerce retailers and food service industry. They have a moat in distributing natural and organic food with their largest customer being Whole Foods (owned by Amazon $AMZN )
๐ฐ In 2018, they acquired Supervalu but ๐ฉ๐ค๐ค๐ ๐ ๐ก๐ค๐ฉ ๐ค๐ ๐๐๐๐ฉ. There's also the risk that they lose their largest customer, Amazon, in 2025 as the contract expires but at current price, I believe it is very cheap and they can survive even the worst case scenario. They are selling their retail business (from the Supervalu acquisition) and this will provide them some cash to repay the debt. Moreover, they are FCF positive as most of their losses in 2018 and 2019 comes from goodwill impairment.
๐ต In my analysis, UNFI has an intrinsic value of $4.4 billion and today's market cap is $1.5 billion. It is undervalued. You may be worried about the debt, etc. But let's just look at Tesla $TSLA a company with about the same revenues, less profits but much more debt and $800 billion valuation. I'm not trying to compare apples with oranges but if you believe that Tesla can survive, why not UNFI, a ๐๐ช๐จ๐๐ฃ๐๐จ๐จ ๐ฌ๐๐ฉ๐ ๐ ๐ข๐ค๐๐ฉ ๐๐ฃ ๐ฉ๐๐ ๐๐ค๐ค๐ ๐๐ฃ๐๐ช๐จ๐ฉ๐ง๐ฎ?
Watch the full video on YouTube:
https://www.youtube.com/watch?v=v3FQ2JV1k8Y&list=UUPO3uUyoXSaFWG-Ldq1mqEQ&index=1
Full analysis of UNFI:
https://ishfaaqpeerally.teachable.com/courses/662813/lectures/30455848
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