Hedgeye CEO Keith McCullough is adding Sprouts Farmers Market (SFM) to the long side of Investing Ideas. Below is a brief note.
Yep, after covering plenty of shorts (which I do when SPY and IWM are down for the 3rd day in 4), this move is going to make me slightly net LONG again (I made the same “net long” move last Wednesday).
In order to make money in bear markets, you need to understand how to front-run the bulls.
Like Kroger (KR), Consumer Staples analysts Daniel Biolsi and Howard Penney like Sprouts Farmers Market (SFM). It's -2% here on slow volume towards the low-end of its @Hedgeye Risk Range.
Here's a summary excerpt on the name from our Institutional Research product:
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We find Sprouts attractive for many of the same industry reasons behind our Kroger rationale. Sprouts is a grocer focusing on food that is natural, fresh, and organic. Its HSD% store growth opportunity, accelerating SSS, and inflecting margins at a mid-teens P/E multiple is an anomaly. Sprouts also boast a strong balance sheet and generate visible free cash flow. |
- KM
