Hard to Digest United Natural Foods
I say "back on" here because prior to these recent gains, shares of United Natural -- a leading distributor of organic foods -- were cooling off, down by as much as 11% since the company hit a new 52-week high in October. The valuation (then) was considered hard to digest. But things have changed.
All it took was for Sysco Foods
While Sysco is no stranger to acquisitions (US Foods is one of more than a dozen companies Sysco has picked up this year alone), it very rarely, if ever, overspends. Although United Natural has developed a strong track record of exceptional growth results, it's hard to see the value that Sysco would acquire.
I'm not suggesting that United Natural wouldn't be a "natural fit" to Sysco. But since company generates what amounts to less-than one-seventh of Sysco's annual revenue, I don't immediately see what (if anything) United Natural can offer to Sysco that Sysco couldn't already duplicate on its own, given its massive infrastructure.
Plus, as I've said regarding Annie's
It's true that -- as with Annie's -- United Natural has built a strong name for itself on the relationships that have been established with leading retailers like Whole Foods