Natural Grocers by Vita Cottage (NYSE:NGVC)

CAPS Rating: 4 out of 5

Recs

4
Player Avatar Snaake (45.26) Submitted: 5/9/2014 8:41:02 PM : Outperform Start Price: $23.02 NGVC Score: -27.62

My CAPS call was placed at $23.03 on May 5, 2014 after shares of Natural Grocers Vitamin Cottage (NASDAQ: NGVC) plunged 37% due to the company lowering guidance on their 2014 forecasted same-store sales growth to 5.5 to 6.5%, previously at 7.5 to 8.5%. Shortly thereafter, several insiders acquired a total of 33,114 shares, including Kemper Isley (Co-President), Elizabeth Isley (Executive V.P.) & Directors Richard Halle & Edward Cerkovnik--a $750K vote of confidence.

During the first-half of 2014, NGVC opened 9 stores for a total of 83 stores in 13 states. The company plans to open 15 stores total in 2014 and sees the potential for 1,100 stores nationwide. This potential for aggressive growth is the reason the stock has been on my watch list over the last year for a real money strike. Unfortunately, my current cash position is negligible and needless to say, this is a teachable moment.

NGVC has a P/E of 45.14, a market cap of $543M, 83 stores and 2013 revenue of $430M. By comparison, Sprouts Farmers Market has a P/E of 58.26, a market cap of $3.96B, 172 stores and 2013 revenue of $2.4B. With the recent drop, shares of NGVC are now at an attractive valuation given future growth prospects. And while investors should not expect 1,100 stores overnight, perhaps135 stores, or more, are in the foreseeable future by 2017. We shall see on May 5, 2017!

Member Avatar Snaake (45.26) Submitted: 5/9/2014 9:20:46 PM
Recs: 0

*$23.02
**Natural Grocers by Vitamin Cottage
***(NYSE:NGVC)****
****Have been focused on the recent fluctuations of the NASDAQ

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