A few weeks ago, I made a video celebrating the great earnings of UNFI $UNFI . The stock gained 20% in a few days. Since then, it has not been doing so well. What's happening?
There are many tailwinds on UNFI. For example, their contract with Wholefoods $AMZN was renewed till 2027, they have a moat in organic and natural foods. There's now a new catalyst, inflation.
Some of you asked me if inflation is really a catalyst with their low margins? Actually, it is and I explained in the video why. It is true that this short-term supply chain disruption is affecting them but long-term, inflation is a tailwind.
A market selloff after great earnings and consequent gains are not uncommon to UNFI. But this time, there are days when the stocks did very poorly. On these days, you will notice that UNFI reported changes to their management. UNFI had a new CEO since last year and he has yet to prove himself. Bringing changes to the management brings more uncertainty to the stock. As long-term investors, we should not worry about this. Focus on the fundamentals and the long-term.
Full analysis of UNFI:
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