Produce section of a Sprouts Farmers Market store
Image source: Sprouts Farmers Market.

What happened

Shares of Sprouts Farmers Market (NASDAQ:SFM) soared 25.2% last month, according to data provided by S&P Global Market Intelligence.

SFM Chart

So what

The organic grocery store chain’s stock rocketed higher on rumors of a potential acquisition by Albertsons Cos., the industry titan controlled by Cerberus Capital Management.

Bloomberg first reported the news on March 19. Interestingly, Sprouts’ shares rallied sharply in the days prior to Bloomberg’s report, raising questions that some investors may have had knowledge of the talks between Sprouts and Albertsons before the news broke publicly.

Still, with Sprouts’ stock currently trading at around $23 per share — basically the same as where it ended March — there could still be significantly more upside if a deal is completed. In fact, analysts have suggested that Sprouts could fetch as much as $26 a share, which would represent upside of more than 13% from today’s prices.

Now what

Organic grocers are in many ways victims of their own success. The high demand for natural and organic foods has…