Get the right hook and produce some growth, and your stock can be off and running. Though I believe organic foods distributor United Natural Foods (NASDAQ:UNFI) should be well-rewarded for an appealing business with definite growth prospects, I just don't see a whole lot on the table for newcomers to the story.

The basic growth story is certainly intact. Reported revenue was up more than 19% this quarter, with comparable growth up nearly 16%. Sales to supermarkets and independents grew faster than to the supernaturals market, and private-label sales were up 54%.

I'm not quite sure what to make of the margin picture, quite frankly. United Natural Foods' gross margins were down again, and that's not something I normally like to see, but the gross margins here always seem to be down on a year-over-year basis when I look at them. What's more, if you exclude the impact of stock compensation expense, operating margins were higher, so it all nets out OK in the end.

I think everybody pretty much understands the major risk factor for this company. Its current contract with Whole Foods (NASDAQ:WFMI) expires in less than two years, and who knows how those negotiations will go? That uncertainty is significant, since Whole Foods provides more than a quarter of the company's sales. By the same token, I'd be surprised if a workable deal didn't get done: Wild Oats (NASDAQ:OATS) thought it could replace or do without United Natural Foods, and it ultimately came back.

There are certainly plenty of likable hooks here. Organic/natural food is still a popular and growing category, and even your Wal-Marts (NYSE:WMT) and Krogers (NYSE:KR) are stocking more of it. Then you have that whole private-label business to consider. And hiring the former head of one of your larger rivals as a regional vice president has got to help, too.

Valuation is still the sticking point for United Natural Foods, though. I'm absolutely willing to admit that you often have to pay up for high-quality growth, and I'm equally willing to admit that sticking to my value principles left me choking on the dust of stocks like Hansen Natural (NASDAQ:HANS). But quite frankly, it's easier for me to stick to the method that has made me a lot of money already than it is to change. So if the price I'm willing to pay is missing the occasional United Natural Foods, so be it.

What type of investor are you? Whole Foods was recommended in Stock Advisor , and Wal-Mart was selected in Inside Value . Talk stocks with other investors and our analysts when you give our newsletters a try.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).