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Subject:  Re: NGVC - Natural Grocers Date:  11/18/2018  8:56 PM
Author:  BenHacker Number:  26209 of 26241

Just poking my head back in here... have discussed this a bit on Twitter with ET, but hadn't circled back.

The stock went to hell after my initial pitch... (under $5) on comps that flattened to zero and declining gross margin coupled with AMZN's acquisition of WFM.

I did buy more on the decline and even got a large added stake at under $5, and added more in $7... let some go at $9, $13, and have mostly let the rest run.

This has been an overall good investment, but the volatility was quite high.

Strangely, the results were fairly mild given the share movement (both on the downside and the upside) and further, the equity isn't levered with debt, so the valuation move mostly captures the valuation change of the firm.

Anyway, I now have a fairly large position due to some growth, but results do not appear to be improving dramatically. Now kind of no-mans-land for me... although I still like the company's direction, their financials are not setting anyone's imagination on fire, and you could argue they are now statistically quite expensive @ $22 / share.
- SSS for Q4 were 6%+, but GM only 26.3%
- forecasts for '19 are 2-4% range, with $0.33-0.40 EPS (assuming flat GM)
- store growth was moderated as they worked on operating goals and other issues, store openings are ~6% next year (forecast).

I think their forecast is pretty conservative... to me the key is if they can expand GM even a bit and get some operating leverage.

One side note, this stock is a textbook if bad liquidity. The moves of the shares (both down and up) have been simply stunning, and mostly, not really clearly related to some fundamental news. Friday the shares traded in a 40% *range* from prior close. stunning... read the earnings call and try to figure that out. :)

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