United Natural Foods (Nasdaq:UNFI) offers an interesting test-case for two conflicting realities of Wall Street. On one hand, investors frequently pay up for above-average growth stories, and particularly those with strong market share and/or barriers to entry. On the other hand, margins are an under-appreciated driver of investment performance and investors seldom pay high multiples for weak margin stories. While these shares have underperformed in a hot market for packaged food stocks, the market continues to assign a pretty rich value to this natural foods distribution company.
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http://www.investopedia.com/stock-analysis/052913/strong-growth-can-help-united-natural-foods-grow-its-multiple-unfi-wfm-syy-kr.aspx
Investopedia: Strong Growth Can Help United Natural Foods Grow Into Its Multiple
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