- Freshpet was one of the worst-performing mid-cap stocks last year, down 33% vs. a 12% return for the Russell Mid-Cap Growth Index Fund.
- This underperformance was attributed to supply chain challenges and operational inefficiencies that impacted production, and margin contraction due to inflationary pressures.
- Fortunately, the issues appear to be in the rear-view mirror, with pricing helping to offset margin pressure, and the company investing in automation and its team to improve production capacity.
- With Freshpet trading at ~7.2x sales, I don't see enough of a margin of safety just yet, but if we were to see a dip below $78.20, I would view this as an attractive entry point.
For further details see:
Freshpet: Valuation Finally Beginning To Improve