Holding the offer price nicely. APO must have some plausabilty with the market.

I expect changes at the stores soon

Wow Mike, my mind must have been completely somewhere else I totally misread your question that scenario having never entered my mind and being quite remarkable, but no, nice thought tho' lol. It's a straitforward buy the company, improve its performance, and then sell it back into the marketplace at a higher multiple than the purchase price or so Global hopes.

Sorry for any confusion.

So if I bought then sold now, even though I don't have any of the shares anymore, I'll still have the $28 per share ??

I don't have shares either nor a lot of experience in these deals,

but if you look at the chart, the equity was taken out of the deal for retail at the open on the day it was pr'd. As a matter of fact you can see insiders or some really really intuitive investors were buying the day before the pr, just the way it works as we know or should know.

To buy now you'd want to have a longer term outlook and determine why is the buyer acquiring, what do they see and if you have confidence in the acquirer to grow the business? The other consideration I would have is what would the effect be if TFM decided to shop for a better deal and the liklihood they could get one, none of which I can answer for you.

Best of luck.

"The spread is trading at $0.19 gross or about 0.67%. If you annualize the spread out to a two or 2.5-month timeline, the spread is trading at 3.2%. This is a relatively narrow spread. The Fresh Market is allowed a 21-day “go-shop” period to solicit other bids."




.

So if I bought then sold now, even though I don't have any of the shares anymore, I'll still have the $28 per share ?? Sorry I'm new to investing so any more or new tip or advice is much appreciated .

You can get more than $28 if you sell now

$28.33 to be precise. This should help explain the deal.

Merger arbitrage
In merger arbitrage, an investor generally buys the stock of the company being acquired, short sells the relevant ratio of the acquirer’s stock if applicable, and waits for the deal to close. When the merger is complete, the investor exchanges the stock of the company being acquired for the amount agreed on in the deal.



Big deal in the consumer sector

On March 15, 2016, Apollo (APO) and The Fresh Market (TFM) announced that Apollo will buy The Fresh Market in a $1.3 billion deal. The deal will be a cash transaction set at $28.50 per share.

The companies expect it to close in 2H16. The deal is structured as a cash tender offer. Typically, a cash tender offer closes much quicker than deals that require a vote. There isn’t a need to get a proxy statement through the U.S. Securities and Exchange Commission. Also, there isn’t a waiting period after the mailing. Basically, the companies need to get approval under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, commence a tender offer period, and then close the deal if the minimum threshold is met.

The spread is trading at $0.19 gross or about 0.67%. If you annualize the spread out to a two or 2.5-month timeline, the spread is trading at 3.2%. This is a relatively narrow spread. The Fresh Market is allowed a 21-day “go-shop” period to solicit other bids.

Apollo Buys The Fresh Market in a $1.3 Billion Cash Tender Offer - Yahoo Finance
http://finance.yahoo.com/news/apollo-buys-fresh-market-1-110820022.html

By what date would you need to have shares of the Fresh Market to obtain the $28 for each share ??

The Fresh Market Agrees to be Acquired

by Funds Managed by Affiliates of Apollo Global Management for $28.50 Per Share in Cash.

The Fresh Market, Inc. (NASDAQ:TFM) (“The Fresh Market” or the “Company”), a growing specialty grocery retailer, and an affiliate of Apollo Global Management, LLC (NYSE:APO) (together with its consolidated subsidiaries, “Apollo”) today announced that they have entered into a definitive agreement (the “Merger Agreement”) whereby certain funds managed by Apollo, a leading global alternative investment manager, will acquire The Fresh Market for approximately $1.36 billion.
The $28.50 per share all-cash offer by the Apollo Funds represents a premium of approximately 24% over The Fresh Market’s closing share price on March 11, 2016, and a premium of approximately 53% over the February 10, 2016 closing share price, the day prior to press speculation regarding a potential transaction.

http://ih.advfn.com/p.php?pid=nmona&article=70750093&symbol=TFM

The 'Dark Act' was an incredible slap in the face to American consumers and is emblamatic why whactards like Trump and Sanders are even being listened to, much less may see success. I'm one of the ones that would like to throw the whole bunch out of Washington, but there are a billion minutiae that would go into making that work practically.

Rant over, I find very few reasons to go into the Fresh Market these days as they are too expensive and the novelty of their candy, coffee and meats has worn off, I stiil like the scenery from the class of shoppers. ;) I also got put off when I went to buy some of their hyped homemade all natural ice cream and saw it was heavy with high fructose corn syrup. Regardless of the detrimental health benefits, it just ticks me off in a premium priced store as the use of high fructose corn syrup is a cost saving measure. Same with Joe's who's employees have proudly proclaimed to me several times there is no high fructose corn syrup in any of the items in their store. I've since found 3 items.

Kroger's is cleaning up, I just wish they's expand the natural food section a little quicker and get costs down, but then that no doubt just invites more fraud in organic labeling that's already supposedly pervasive.

What was your question again? lol I rarely shop there, but would invest if I thought GMO labelling would increase shareholder value. That really stinks that the feds once again are sticking their nose in state's business, this time on Monsanto's dime reportedly.

I'm in the need/desire to eat healthy cheap camp unfortunately

GMO labeling could really increase the business of stores like TFM. More and more grocery stores carry organic items, but stores that carry a broad selection of non-GMO selections/non organic can do well because they are cheaper than organic, but healthier than GMO conventional food.

Kroger involved stock skyrockets

Time for a little bounce perhaps?

Q2 EPS 24c vs 32c Misses 35c Est
Thursday , August 21, 2014 19:00ET

(Up $2.27 AH)

QUARTER RESULTS 
 Fresh Market, Inc. (TFM) reported Q2 results ended June 2014. Q2 Revenues were $422.23M; +19.02% vs yr-ago; BEATING revenue consensus by +2.52%. Q2 EPS was 24c; -25.00% vs yr-ago; MISSING earnings consensus by -31.43%. 
  
 Q2 RESULTS      Reported      Year-Ago     Y/Y Chg      Estimate    SURPRISE 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 Revenues:       $422.23M      $354.76M     +19.02%      $411.85M      +2.52% 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 EPS:                 24c           32c     -25.00%           35c     -31.43% 
 ----------  ------------  ------------  ----------  ------------  ----------

Personally I'm all for GMO labeling,

at least until we get some definitive answers. I try not to eat it, but not because it's GMO, but because I try to eat organic as often as possible.

I just realized how silly that sounded, is there any reason GMO can't be labeled as organic? That brings up one reason why I'm a bit cynical with the whole FDA, gubamint reg. thing, the fact of how easy it is to label non organic as organic and how often it occurs. I expect we'll see the same with GMO labeling.

There will forever be a segment in society that feels our money is better served in their pockets than in our own, even if health is affected.

I'll end at the risk of going off on a tangent in saying I hope the 'baby', GMO Tech, 'doesn't get thrown out with the bath water'. You only have to look at environmentalism to see how fervent beliefs can get far out of whack (read EPA for one).

Cheers

Interesting article, Wildbilly.

And the thing about investing IS perception is reality.

With GMO corn, canola oil, soy etc. all at above 90% of those crops total production in the US, even just a small decline from addrssing the demands of concerned consumers will provide a big opening--a boost--to comapnies like TFM and WFM.

The perception, in some consumer circles, is that GMO has NOT been proven to be safe over time.

And in those circles, the proactive consumer will want to knwo what is in his food so he can decide for heimself whether or not to ignore the reality of what is in his food.

I agree that GMO labeling is the next

important wave as it relates to how consumers shop. As the author of your article stated there is no hard proof in the dangers of consuming GMOs (I'm sure your loaded with anecdotal evidence to the contrary) "perception is reality" is what we as investors need to pay heed to. I am a very active health advocate and am interested in pet care as well and have invested accordingly at times, but try not to let my passion over rule my financial security.

For the sake of discussion, as there is always two sides to every story, here is a bit of the devils advocate about taking too rigid of a stance against GMOs.

http://www.pressherald.com/2014/05/04/the_conversation__mike_bendzela_is_skeptical_about_the_gmo_skeptics_/

TFM has a great opportunity.\\Check this out\\


http://seekingalpha.com/article/2308475-digesting-the-gmo-food-controversy-and-what-it-means-for-your-investment-portfolio

Interesting, I didn't realize that,

I've owned this stock once based on good press in May/June and an oversold chart.

I half hang around because as I stated previously, I like to shop there.

It sounds as if they're a ways out in getting geared up, but worth checking out.

Thanks

The Fresh Market will be moving to a bigger selection of non-GMO food products in the future. Like Trader Joe's is and Whole Foods is by 2018. Kroger and Safeway will not be pushing for non-GMO.

And that is where the Fresh Market will shine.

You nailed my thoughts perfectly,

if you shop carefully and selectively you can actually do well, but you're right in that it's too expensive for me to do all of my shopping there. I love the almond butter machine, the concoctions in the meat and deli sections ie: wraps, homemade pizzas, skirt steak wheels, country ham as well as the confection/candy section although I can only very occasionally indulge these things anymore. Their fresh squeezed lemonade can't be beat on price and quality and until the last year or so the only place I could find quality dates and figs and I can go nearly orgasmic in the coffee section.

I'll often go out of my way just for a handful of items available nowhere else and for the reasons we've stated plus the fellow customer quality is hard to beat on a percentage basis if you know what I mean.

ps,

they are falling behind in the health/organic segment however which Kroger has very quickly reacted to and is yet devoting more and more space to.

I like the ambience and experience of going to TFM. It just that it can be 30% more expensive than go to Publix and/or Kroger. The fresh meats and produce are undeniably better. And the esoteric food selections on the shelf are great.

But if you have a budget, you cannot do ALL your grocery shopping there. They have to address that issue.

The Fresh Market upgraded to buy at Northcoast

Fresh look at The Fresh Market

The Fresh Market (NASDAQ:TFM) is upgraded by Northcoast to a Buy rating from Neutral.

The call cuts against the grain of the Street which has been leaning to the bearish side (Morgan Stanley, Goldman Sachs, Sterne Agree) on the specialty grocery store operator.

Northcoast thinks shares of TFM were oversold and sees positive fundamental factors

GOLDMAN Sell rating sure does not help things.

Tech fuels farm-to-table 2.0

Online grocers are getting fresh food to customers faster.

BY MATTHEW FLAMM
JULY 7, 2014

Benzi Ronen has shifted Farmigo's focus to the suburbs, though the company is headquartered in Brooklyn.

$620B
Sales of groceries nationwide in 2013
-
$56.9B
Sales of organic and natural foods nationwide in 2013

$486M
Amount venture capitalists invested in grocery e-commerce companies in the year ended March 31

Technology has come to the farm-to-table movement, and the market for organic squash blossoms, pastured eggs, artisanal cheese and hormone-free ham may never be the same again.
The ease with which the grocery supply chain can now be managed through software and mobile devices has driven an explosion of investment in food and grocery e-commerce startups—close to $500 million in the past year. That's helped spawn growth in the farm-to-table niche—and in its East Coast epicenter, Brooklyn.
Competition has grown so intense among local-food delivery firms and entrenched players like FreshDirect that one Brooklyn startup, Farmigo, recently switched its focus from the boroughs to the suburbs.
Experts say a historic shift in the formerly sleepy sector is taking place as a result of new technology meeting pent-up demand.
"Distribution has always been the biggest problem for the local-food movement," said Carlotta Mast, senior director of content at New Hope Natural Media, which covers the natural foods industry. The startups bring an Amazon.com-like user experience to the traditional farmers market. "It's like you're virtually browsing the farm stand," she said.
All this startup activity in Brooklyn is one reason Adrienne Lytton, a 39-year-old mother of two in Scarsdale, N.Y., no longer goes to the supermarket for her family's food. In April, she became an "organizer" for Farmigo, rounding up friends and neighbors to order groceries from the online service, which drops them off at her home every Wednesday.
"The only things I buy at a regular supermarket anymore would be paper towels and some random items," she said. "The food [from Farmigo] is so fresh it's crazy."
Farmigo acknowledges it took the path of least resistance in shifting its business development resources to the suburbs. But founder Benzi Ronen believes the company's farm-to-neighborhood approach, in which drop-offs are made to schools, workplaces and organizers' homes—rather than to each customer's door—works best with people who are already in their cars.
Deliverance

Online grocers in the U.S. generated $65 billion in revenue last year. Here are top players.

Company Sales

Peapod $568 million

FreshDirect $374 million

Safeway Inc. $208 million

AmazonFresh $60 million

Source: IbisWorld

Getting out of the city

"Let everyone else fight the urban war," said the chief executive, who moved the company to Dumbo from San Francisco in March 2013 after raising $8 million in financing. "We have a model we think is very well suited to the suburbs."
Having spent the past year putting its infrastructure in place, Farmigo just moved into a 5,000-square-foot headquarters in Gowanus that Mr. Ronen plans to use for food-tech meetups. Based on outside requests for new "communities," he's forecasting rapid growth.
So is Good Eggs, a San Francisco-based "farm-to-fridge" startup that began making home deliveries in Brooklyn in November. The New York offshoot will leave Williamsburg for a 20,000-square-foot location in Bushwick this summer and expand its door-to-door service to Manhattan next year.
Meanwhile, Good Eggs' year-old Williamsburg neighbor, Quinciple, uses cargo tricycles to deliver a weekly, "curated" box of local products to its Manhattan and Brooklyn subscribers. It's in the midst of raising a seed round of financing.
All of these startups compete with Whole Foods and FreshDirect, which has extensive local food offerings and which may soon be joined by Amazon. The Seattle-based giant is rumored to be entering the New York market sometime this year with its AmazonFresh same-day deliveries. That could put pressure on FreshDirect, which already competes against online grocer Peapod and is battling community groups over its plan to build a facility in the South Bronx with nearly $130 million in government subsidies.
Executives at farm-to-table firms say they differ from the major retailers in both model and mission: The startups aim to connect consumers and producers in the most cost-effective ways. And they hold little to no inventory, relying on technology to track the availability of goods from a range of sources and offer them to consumers.
The result, they say, is lower prices for premium products than customers would pay at Whole Foods or FreshDirect, and better prices for the farmers than they would get from wholesale distributors.
"Good Eggs makes it really simple to get our apples pretty much directly to customers with a single delivery, and as a result we're getting very close to a retail price point," said Josh Morgenthau, son of the former longtime district attorney, who manages his family's eco-certified apple farm in Fishkill, N.Y., when he's not running Good Eggs' Brooklyn operation. "We're really cutting out all the middlemen."
The setup is also proving attractive to investors. "We like that reinvention of the grocery store model, as opposed to tacking delivery on top of what is a 200-year-old business model," said Bryan Schreier, a partner at Sequoia Capital, which led an $8.5 million investment round in Good Eggs in September.
Venture capital funding in the grocery e-commerce and delivery sector in the U.S. totaled $486 million in the year ended in March, a 51% jump in spending over the prior year, according to CB Insights.
Though local and organic foods make up a mere morsel of the nation's $620 billion grocery business, it's the fastest-growing segment—and a vast new opportunity for the tech industry, Mr. Schreier said. In 2013, the entire organic- and natural-foods market came to $56.9 billion, up 12% from the prior year, reports Nutrition Business Journal.
'Hard to get right'

For all their innovations, the farm-to-table startups still face the challenge of food delivery.
"Home grocery delivery is just really hard to get right," said Forrester Research analyst Sucharita Mulpuru. She cited temperature-control issues, customers' reluctance to wait through lengthy time windows, and the costs incurred when people are not home at the appointed time.
"I like the economics of [Farmigo]," she added. "But they need to figure out how it scales over time."
Mr. Morgenthau conceded the difficulties of doing home deliveries five days a week—soon to be seven—but said Good Eggs controls costs using insulated, reusable packaging instead of refrigerated trucks and sending customers text and email reminders on delivery days.
Quinciple said it makes sure to get alternate locations in case customers aren't home. The company, making 2,500 deliveries a month, keeps missed connections to a tenth of 1%, said founder Markus Jacobi.
For Mr. Ronen, the challenge is finding organizers like Ms. Lytton as Farmigo extends its network into New Jersey this summer, following its recent expansions into Long Island and Westchester. He is planning to step up grassroots marketing using "a lot of ideas" from the 2012 Obama campaign, he said, and estimates the company will be adding 50 communities a month. Farmigo currently has 100 communities in the New York and San Francisco areas.
He also said there need to be many farm-to-table startups: "If you want to create a new food system that's able to leapfrog supermarkets, no one person or company is going to do it on their own."

http://www.crainsnewyork.com/article/20140707/TECHNOLOGY/307069993/tech-fuels-farm-to-table-2-0#



.

Goldman Sachs 'clowngrades' TFM

Goldman Sachs turns negative on The Fresh Market.

The Fresh Market (TFM) is downgraded to a Sell rating from Neutral by Goldman Sachs.

The investment firm thinks TFM will be under pressure from rivals in the specialty grocery

sector and could see higher input costs in key categories. The two trends are likely to cut into margins.

Made 8% in the last 4 days

A Fresh Buy in a Heated Market


The Fresh Market: A Fresh Buy In A Heated Market
Jun. 2, 2014 3:19 PM ET | 4 comments | About: The Fresh Market (TFM)

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in TFM over the next 72 hours. (More...)
Summary

Concerns over industry crowding have substance and company does not have strong competitive advantages, but market treatment seems overdone.
Strong industry prospects with natural/organic grocery expected to continue to grow low double digits to 2020.
Seasoned, talented, and invested management that has the right approach to growth.
Hardly off 52-week low, below all moving averages, and at 13.2x no-growth FCF, stock seems attractive both fundamentally and technically.
Intend to initiate concentrated position on day of publication.
In a prior article, I detailed why and how I would begin performing one hour of preliminary research on potential investments with an emphasis on reasons not to invest before delving any further into the idea. In this article, I will organize my findings on The Fresh Market (TFM).

The above paragraph is the generic spiel I've been using in all my articles lately, but this article is a bit different. Unlike, the other stocks I've checked out recently, I did not go into my TFM hour completely unfamiliar with the company. In February, I spent 3-4 hours researching and wrote on the stock, but never invested. My strategy has changed rather dramatically since then however, and so I will write this article independent of my old one rather than as a supplement.

Business Overview

The Fresh Market was founded in 1982 and operates 157 specialty/natural, small grocery stores in 26 states in the US.

Competitive Position

TFM competes with other specialty/natural grocers like Whole Foods Market (WFM), Sprouts Farmers Market (SFM), Trader Joes (private), and Natural Grocers by Vitamin Cottage (NGVC), as well as larger grocers expanding into the specialty market like Wal-Mart (WMT), Target (TGT), Safeway (SWY), and Kroger (KR). The specialty grocery industry is tough like almost all of retail, and getting tougher. It has gone from being seen as a niche market to now being in the crosshairs of giants like WMT and TGT. Target in particular seems to be making an aggressive push. I was in the store a few days ago and noticed lots of high quality, pre-seasoned, ready to cook meats, cheeses, nontraditional deserts like gelato, etc.

This niche-to-mainstream shift has really scared investors invested in the specialty grocers. The four publicly-traded firms have all declined a very similar amount since 10/25/13 (indicating the move in each stock is industry-related). The firms are down an average of about 43% in a little over 7 months.



The brunt of the decline came in early May when Whole Foods in its Q1 results missed on revenue, missed on EPS, missed on comps, lowered guidance, and attempted to reset longer-term market expectations lower. The other stocks were second-hand victims of the damage.

The market seems to believe there is little differentiating TFM but the company's management has a different take. From the company's Q1 conference call:

We have observed and recent extensive third-party customer research has confirmed that consumers come to us because of our unique combination of outstanding food quality, engaging customer service and an inviting store environment. We believe this combination provides us great flexibility and differentiates us from our competitors who compete on ingredients based product assortment, price or some combination.

So management believes that other companies compete on price and selling organic/natural products while TFM focuses on quality, customer service, and an inviting store format.

Overall, I have a mixed opinion on the company's competitive position. 'Quality, customer service, and an inviting store format' sounds like gushy PR. I feel like every retailer of any kind ever could and has probably used those terms to describe what sets it apart. In high school, I worked as a sales associate at Marshalls (TJX) and I couldn't even tell you how many times I was lectured on customer service at nightly meetings. You don't do retail without customer service.

On the other hand, I have heard very good things about the quality of the meats and cheeses in TFM's deli. Further, I do think a good deal of differentiation is derived from:

the company's store size (self-proclaimed to be small but actually right in the middle of the 5 specialty grocers I looked at)- 55% of WFM average square footage, 76% of Sprouts, 210% of NGVC, 210% of Trader Joes
smaller selection - 9-10k SKUs compared to 21k at Whole Foods
unique geographic base (US Southeast)
I certainly don't think TFM has a moat or even strong competitive advantages, but I don't think the company is as vulnerable as the market reaction seems to imply. The company is pretty small now. It does not need to put Whole Foods out of business to do well. Even at the target of 500 stores, the company would be small. This also presents a great deal of opportunity. 500 stores is over 3x the current store count.

I'd really like the chance to visit a store. The closest store is 50 miles away. I still plan on making the trip sometime this week.

This is the big negative about the long story, but I don't think it is as horrible a net negative as the market is pricing in.

Industry Prospects

From Intangible Valuation article and, in turn, SFM 10-K:

According to the Nutrition Business Journal, sales of natural and organic food have grown at a CAGR of 12.0% from 1997 to 2012, reaching a total market size of $54 billion in the United States and are expected to continue to grow to $113 billion in 2020, representing a CAGR of 11.3% from 2013 to 2020.

So the natural/organic industry in which TFM competes has grown at a double digit rate for close to 2 decades and is expected to continue to do so, at a slightly lower rate. The endpoint of $113B in 2020 represents 18% share (for the entire natural/organic industry, not just TFM) based on current US grocery sales of $620B and presumably less as the denominator should also be larger in 2020. That does not seem so unrealistic. Natural/organic seems like a pretty broad category. If these estimates materialize then TFM may be able to coexist profitably and grow with peers going forward. After all, TFM and peers have done just that in the past with the industry growing at a comparable rate.

I find this very comforting. If industry growth were not so promising/redeeming, I probably would rule out an investment in TFM based solely on the lack of material competitive advantages mentioned above.

Insiders

Executives are paid extremely well at TFM:

(click to enlarge)
see link

(Source: Morningstar)

The total of $7.56M for 2013 represents a whopping 5.4% of 2013 operating cash flow. That's a lot compared to other companies I've looked at, however, a few comforting points:

Management is actually really talented and seasoned
Much of the pay is in stock and executives hold large direct stakes in the firm as a result that they have supplemented with voluntary purchases recently
I mentioned this in my last article, but I am genuinely impressed with TFM's management team. The company seems return-oriented and VBM seems to be ingrained in the corporate culture, unusual for a company of its size. Most small companies struggle to comply with US reporting standards, but TFM seems to go above and beyond. This time around, I really took notice of how careful management is being in expanding. In his article, Intangible Valuation correctly referenced Peter Lynch. In my mind, Lynch is the guru of investing in small restaurants and retail companies. I read his books and one of the major lessons in the retail analysis section is that promising companies get into trouble most frequently when they try to grow too quickly. Too many new stores too quickly can mean subpar lease terms, site selection, neglect of existing stores, and so on. It's just not smart. I am impressed by how much effort and patience management at TFM is putting into expansion. Most of the prepared remarks in the Q1 conference call detailed site selection and deal structuring. The company recently retained a real estate analytics firm to perform a white space analysis and management is now pursuing built-to-suit lease terms in order to decrease risk and transfer part of the initial capital burden to the lessor.

The company's CEO, Craig Carlock, has been CEO for over 5 years and been with the company for 15 years. Chairman Ray Berry founded the company in 1981 and served as CEO from 1981-2007.

Carlock and a few others have made direct investments recently and Carlock has direct holdings worth $6.7M, or 2.35 years of total compensation based on his 2013 take. That seems very significant.

(click to enlarge)
see link

(Source: SECForm4.com)

Timeliness

This is becoming an increasingly critical factor in my investment decisions. I care a great deal about entering stocks at relative lows in order to secure myself in case the rest of my thesis does not play out. Deep below all moving averages, and attractively positioned in its 52-week range, TFM seems quite timely:

(Source: FinViz.com)
see link

Performance & Valuation

Operating cash flow has grown 14.5% annually since December 2009 and 26.2% in the last year. Revenue has grown 15.3% annually since December 2009 and 15% in the last year. Most recently, in the company's Q1 results, comps increased 2.5% Y/Y. The company also reaffirmed its full year 2014 guidance:

(click to enlarge)
see link

(Source: TFM Investor Relations)

Particularly impressive is the continued stability in comps growth. It looks like the company is performing well.

EPS is greatly understated because depreciation exceeds maintenance capex by a good margin. Trailing operating cash flow is $150.64M. Intangible Valuation came up with no growth FCF of $112M. At a quote of $36.05 with 48.4M diluted shares outstanding, TFM has a market cap of $1.48B. P/FCF is 13.2x. Carlock mentioned 12-15% unit growth going forward. If the company can increase FCF by the midpoint of 13.5%, the stock seems slightly undervalued, but that is probably too conservative. Comps have been improving and are guided to continue to improve and the resulting operating leverage, along with some fat the company has identified for trimming, should enable FCF growth of 15-18%. In that case, the stock looks very cheap. Indeed, the analyst consensus is for 16.9% over the next 5 years and Value Line estimates earnings growth of 16%. I was also surprised to see this in the VL report:

(Source: Value Line)
see link

You don't see estimated gains like that in a Value Line report very often and these estimates are:

Calculated with the stock at $34.93. From the current quote of $30.65 to the midpoint of $92.5 in 2018 represents 32% annualized returns. I'd be happy with even half of that.
Calculated on April 25, before the company reported its excellent Q1 results, which may result in VL making more bullish assumptions in the next update.
Even if headwinds materialize and the company is only able to do 10-11% FCF growth (lower than estimated industry growth and company's guided unit growth), the stock is probably fairly valued at this price.

Conclusion

After scanning through several companies, it looks like I've found another rare stock suitable for a concentrated entry right now. The Fresh Market is an excellent company with strong growth prospects and seasoned, talented, and invested management that has been pulled down on concerns that the specialty grocer industry is getting too crowded. As a result, shares are extremely timely now near a 52-week low and the stock also looks attractively-valued fundamentally at 13.2x no-growth FCF. The only major negative I am seeing is that the company is not as differentiated and its business not as protected as I would like to see. I am skeptical of retailers in general and there does seem to be some substance to the market competition concerns, however I think the market reaction is overdone and the long thesis redeemed by every other element. I am comfortable entering into a large long position and will do so this morning (Monday 6/2).

http://seekingalpha.com/article/2249223-the-fresh-market-a-fresh-buy-in-a-heated-market?uprof=44

CEO Ray Berry 3 purchases last 3 days

http://www.sec.gov/Archives/edgar/data/1489979/000121465914004093/xslF345X03/marketforms-24515.xml

The Best Investment In Organics
About: The Fresh Market (TFM), Includes: SFM, WFM, WMT

The market for organic and natural foods continues to gain strength, and this trend will only get stronger as the economy continues to rebound. As more people find jobs, they'll have more money to spend. Part of that increased income is likely going to go toward eating fresh and natural products.

Adding validation to the movement, Wal-Mart (WMT) has announced plans to enter the organic foods market. Many investors missed the tremendous move in Whole Foods Market (NASDAQ: WFM) shares over the last five years. But there could be another organic food retailer poised for a similar run. That company is The Fresh Market (NASDAQ: TFM).

The Fresh Market growth story
The Fresh Market is still early in its expansion opportunities. Whole Foods has 375 stores compared to The Fresh Market's 150 store base. It plans to add a record number of stores this year, with the long-term goal of hitting 500 stores. Its other top competitor, Sprouts Farmers Market (NASDAQ: SFM), also has around 150 stores. The key for The Fresh Market is to expand beyond its core market. Nearly half of its stores are located in three states: Florida, North Carolina, and Georgia.

The Fresh Market is opening its stores earlier to try and take traffic away from Whole Foods and others. Most of its locations will now be open nine additional hours per week. This move could boost The Fresh Market's comparable-store sales. Both Family Dollar (FDO) and Dollar General (DG) extended their hours back in 2009--as a result, they saw 100 to 150 basis point growth in their comparable-store sales.

The organic foods market
The beauty of the organic foods industry is that its higher cost and quality products help insulate companies from weak economic conditions. The higher cost products attract a higher-income customer who is less likely to trade down when the economy weakens.

Whole Foods shares have been in free fall this year. The organic foods retailer posted comparable-store sales that were weaker than expected last quarter. It blamed intensifying competition, where its stores are seeing overlapping from the likes of The Fresh Market and Sprouts Farmers Market.

Then there's Sprouts, which recently had a strong quarter. This was despite the competitive pressures that Whole Foods felt. Its most recent quarter showed that earnings per share beat consensus by 15%. Comparable-store sales were up 12.8%, which was well above what Whole Foods posted. And while Whole Foods lowered its guidance, Sprouts increased its outlook.

How shares stack up
The Fresh Market trades at a P/E ratio of 18 based on next year's earnings estimates. That's lower than either Whole Foods or Sprouts Farmers, which trade at 23 and 33, respectively. When you factor in Wall Street's growth estimates, The Fresh Market has a P/E to growth ratio of 1.2. That's well below Whole Foods' 1.8 and Sprouts Farmers' 1.6.

On the plus side for investors of Whole Foods, the company offers a 1.2% dividend yield, while The Fresh Market does not. Whole Foods also has virtually no debt compared to The Fresh Market's debt-to-equity ratio of 20% and Sprouts Farmers' at 76%.

Bottom line
The organic foods market is still a young growth story. One of the companies at the forefront of the growth story is The Fresh Market. It still has plenty of store expansion opportunities and the potential to improve comparable-store sales. For investors looking to gain exposure to the organic and natural foods market, The Fresh Market is worth a closer look.

Disclosure: The author owns no shares in any stock listed.
http://seekingalpha.com/article/2236583-the-best-investment-in-organics?ifp=0

Time to load up on pullback

Does TFM have any plans to expand westward? (They're only on the east coast.)

I love the stores.