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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (61700)	2/8/2019 4:22:54 PM
From: E_K_S	Respond to of 78702

Another 15% add for me of UNFI @ $13.26/share. Had three buys last week. Not quite at a full position now. As I research this company and their focus on 'healthy' foods, obtains 30% of revenues from Whole Foods and one where there is significant value in the assets recently acquired through their SVU purchase (distribution center in MN), I find this company quite attractive. GN value still very high at $37.00/share but really depends on what they do for 2020 earnings after expenditure to consolidate their SVU purchase. I am using $1.69/share for 2020 earnings. Even if you cut that back to $1.10 EPS, GN still is around $30.00/share. Therefore, the key value is in their SVU purchase and how much of BV may be written down (from goodwill) and assets sold that have little value to their restructure. There could be 1 or 2 quarters of writedowns in 2020 as they work on integrating those SVU assets into their operations. Management may surprise investors and achieve their integration showing significant expense savings w/ these distribution center assets once they go into UNFI operations. The MN distribution center will go along ways to support Whole Foods expansion into these nearby States as AMZN has announced this earlier this year. FWIW, KR announced the expansion of their Home Chef Food meals at $7.99/serving. KR says it's expanding the rollout of Home Chef retail meal kits to 500 additional stores. In addition to the Kroger store exposure, Home Chef is one of the largest meal kit delivery brands in the U.S. with over 3M meals delivered each month. Kroger acquired Home Chef for around $200M last May. I expect AMZN to expand this concept in Whole Foods and if so, UNFI will be the main supplier of the fresh healthy coponents that may go into such pre-packaged meal kits. Just my speculation but seems like that they already supply a lot of the fresh items to Whole Foods, why could they not put those packagesed meal kits together in one or more of their distribution centers. Lots of opportunities w/ these new SVU assets especially if AMZN helps w/ their robot/inventory technologies. EKS