💸 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 𝙨𝙩𝙤𝙘𝙠 𝙞𝙨 𝙙𝙤𝙬𝙣 𝙗𝙮 𝟮𝟬% over the past 5 years while the S&P 500 $SPX500 gained 111%.
🍏 UNFI is the 𝙇𝙖𝙧𝙜𝙚𝙨𝙩 𝙬𝙝𝙤𝙡𝙚𝙨𝙖𝙡𝙚 𝙙𝙞𝙨𝙩𝙧𝙞𝙗𝙪𝙩𝙤𝙧 𝙞𝙣 𝙩𝙝𝙚 𝙐𝙎 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 )
💰 In 2018, they acquired Supervalu but 𝙩𝙤𝙤𝙠 𝙖 𝙡𝙤𝙩 𝙤𝙛 𝙙𝙚𝙗𝙩. 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.
💵 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 𝙗𝙪𝙨𝙞𝙣𝙚𝙨𝙨 𝙬𝙞𝙩𝙝 𝙖 𝙢𝙤𝙖𝙩 𝙞𝙣 𝙩𝙝𝙚 𝙛𝙤𝙤𝙙 𝙞𝙣𝙙𝙪𝙨𝙩𝙧𝙮?
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Full analysis of UNFI:
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