Savvy Trades and Investments

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UNFI ($15.58) looks cheap. Their earnings came up short of estimates, but they reiterated guidance and gave an upbeat CC. CEO said they expect to renew the Whole Foods contract (biggest customer) in early 2021 (even though the current contract doesn't expire until 2025). E-Commerce biz growing quickly.

I see their trucks in my neighborhood all the time.

https://www.supermarketnews.com/retail-financial/unfi-ramps-business-new-existing-customers-q1

CFRA MAINTAINS BUY OPINION ON SHARES OF UNITED NATURAL FOODS, INC.
11:13 am ET December 9, 2020 (CFRA)

We lower our target by $4 to $22, calculated by applying an EV/EBITDA multiple of 6.8x against our FY 21 (Jul.) adj-EBITDA estimate of $590M (down from $610M), which excludes UNFI's retail business. We lower our FY 21 EPS estimate to $3.16 from $3.50 and FY 22's to $3.50 from $3.55. UNFI posts F1Q (Oct-Q) adj-EPS of $0.51 vs. $0.04, $0.23 below consensus; sales missed by 2%. We note F1Q is typically a seasonally slow period and F2Q should shape up to be much stronger due to the recent surge in Covid-19 cases, capacity constraints in the food-away-from-home channel (limited outdoor dining opportunities), a seasonally strong period for food-at-home demand, and new business opportunities from new and existing customers. Also, UNFI will soon be lapping customer bankruptcies within the independent space. Lastly, outgoing CEO Steve Spinner said he expects the Whole Foods contract (set to expire in 2025) to be extended early in CY 21 (terms still unknown), which could be a significant catalyst for the shares.