US Foods Offers Double-Digit Potential As It Looks To Boost Growth And Margins

US Foods (USFD) is another good example of a business that may seem superficially simple (distributing products to food service customers like restaurants), but that involves quite a bit of detailed blocking-and-tackling details. And it is the extent to which competitors handle those details well that typically separates the long-term winners.

US Foods has done pretty well relative to the S&P 500 and its closest peer/rival Sysco (SYY) over the past year, but I believe there's a credible basis for expecting double-digit annual appreciation from here. US Foods has a large addressable market in which it can still grow (both organically and through M&A), as well as several margin-improvement opportunities. While I think today's price is a pretty fair balance between risk and reward, a pullback would make for a compelling entry point.

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US Foods Offers Double-Digit Potential As It Looks To Boost Growth And Margins