Natural Grocers By Vita Cottage (NGVC)

[investora2z]

This recent listing has been doing great. It is up by more than 33% compared with the listing price of around $18. The offer price was $15, and compared to that the gains for investors have been 59% in less than one year. The company declared good results for 2012 with the sales increasing from $264 million in 2011 to $336 million in 2012 (27% rise). The net income increased from $3.5 million to $6.65 million (90% rise) during the same period. Even on quarterly basis the revenue and net income showed a growth of 28% and 124% respectively. All this has translated into increasing upward momentum for the stock. It is now trading well above its 50 DMA of $21.48 and 200 DMA of $20.77. It is very close to its high of $25 which it achieved in October last year. The way the momentum is going, it seems that that level may be taken out soon. The last trading session saw a 8.2% rise with exceptional volumes of 163K. This is way above the 10 day average volume of 96K shares. NGVC operates in low margin retail business and the market for organic groceries and dietary supplements is a very competitive one. It is crucial that the products on its shelf have great benefits for the customers so that they come back for more. The increased health consciousness of people has increased the market for organic foods and supplements with several players like MusclePharm (MSLP) coming in the limelight for their exponential growth. The next few quarters will be crucial for the company, and if there is a significant turnaround in the US economy, the probability of rising sales / margins will increase. The company itself is giving a guidance of 28% growth in EPS in 2013 which implies that the growth trend may be expected to continue.