The Fresh Market Inc (TFM): Great Business, Premium Price

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The Fresh Market isn’t alone in its premium pricing. Whole Foods Market, Inc. (NASDAQ:WFM) trades at 30 times forward earnings, and arguably doesn’t have as large a growth platform (by store count) as The Fresh Market. It is, though, the gorilla in the space.

For some grocery store industry context, Safeway Inc. (NYSE:SWY) trades at under 10 times earnings and is in a mature, slow-moving state. The company is in the midst of renovating stores in hopes of finding some growth. While not nearly as sexy an investment (and riddled with debt), Safeway Inc. (NYSE:SWY) is priced to move off the shelves.

This author tends to be a broken record when talking about hot stocks, but I feel The Fresh Market Inc (NASDAQ:TFM) is simply too expensive to own, even after its several month sell-off. That said, if this business ever goes on sale, I am backing up the truck.

The article The Fresh Market: Great Business, Premium Price originally appeared on Fool.com and is written by Michael Lewis.

Fool contributor Michael Lewis has no position in any stocks mentioned. The Motley Fool recommends The Fresh Market and Whole Foods Market (NASDAQ:WFM). The Motley Fool owns shares of Whole Foods Market.

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