NEW YORK (TheStreet) -- Investors in Whole Foods (WFM) and The Fresh Market (TFM) have recently reached out to let me know that they didn't appreciate my recent so-called "attacks" on the organic and natural foods industry.

Now, I'm not ready to back away from anything I've said. I believe I was more than fair. I will, however, point out that both companies deserve a great deal of credit for having built strong, profitable businesses. My issue, though, has been with their respective stock valuations, which still carry overly rosy expectations -- particularly in an industry that is growing more competitive each quarter.

To that end, while Natural Grocers Vitamin Cottage (NGVC - Get Report) continues to outperform doubters like me, I still believe that it's only a matter of time before the company, as with Whole Foods and Fresh Market before it, experiences its own growth hiccups. That said, Natural Grocers' management, which has set out plans to expand internationally with 1,100 new stores, disagrees with me.

Plus, with recent reports suggesting that the organic and natural foods market is expected to grow to $80 billion over the next two years, management may very well be proven right. But both Fresh Market and Whole Foods, which are not only bigger, but better leveraged, are also hungry for that market share.

When you factor in the reality that conventional retailers like Wal-Mart (WMT - Get Report) and Kroger (KR - Get Report) have expanded their own organic offerings, Natural Grocers may even begin to see some natural declines. And they could happen much sooner than the Street expects.

Besides, even if I were to take a glass-half-full perspective and say that Natural Grocers could still be a well-run business as a smaller seller of organic foods, I still don't see how its valuation makes sense today -- not at a price-to-earnings ratio of 82.  That is twice the P/E of Whole Foods or Fresh Market. And with Natural Grocers' breathtaking 103% year-to-date gains, investors are risking a lot of money believing there is more unclaimed territory in this industry that rivals don't already know about.

Valuation concerns aside, I was quite impressed with the company's fourth-quarter and full-year results. With revenue and same-store sales advancing 28% and 11%, respectively, Natural Grocers has proven worthy of the Street's optimism. And with management's consistent approach to disciplined cost controls, leading to a robust 60% jump in fourth-quarter profits, you can see how easy it is to fall in love with this business.

At the same time, I refuse to ignore that both Whole Foods and Fresh Market have already blazed the same trail. Today, their numbers are not as gaudy and their valuations and stocks have come down to more reasonable levels relative to where they were. Nevertheless, that hasn't changed my cautiousness (cautiousness, not bearishness). Given that they no longer corner the natural and organic market, they will face challenges in the future.

In that regard, these same sorts of competitive risks would be heightened for Natural Foods, given that it's a much smaller company relative to Fresh Market and Whole Foods. And I believe that pressure from Wal-Mart and Kroger, which have much better leverage, can apply the sort of squeeze to Natural Grocers that Whole Foods and Fresh Market may not immediately feel. Then there's the likes of Sprout (SFM - Get Report), which has organic ambitions of its own.

I do believe, though, that Natural Grocers does have a slight edge in terms of organic ratings. The fact that the company products are guaranteed to contain no artificial preservatives, flavors, colors or sweeteners is a meaningful advantage over Whole Foods and Fresh Market. Natural Grocers also has a strong pricing strategy that sets it apart from its peers.

Nevertheless, as beneficial as the pricing advantage might be to consumers, this isn't enough to make this stock a buy for investors. Until Street estimates come down, I believe it will be harder for Natural Grocers to reach those expectations, given the increased competition in the organic and natural arena.

At the time of publication, the author held no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.