Kingdom Capital Advisors, a private investment firm, released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. Kingdom Capital Advisors is in its third year of operation as of the end of 2024. Since the firm’s inception, small cap stocks, as determined by the Russell 2000 TR, have experienced a cumulative return of roughly 7%, while KCA has experienced an 89% return. The strategy returned 2.07% (net of fees) in the fourth quarter compared to 0.33%, 2.41%, and 4.93% returns for the Russell 2000 TR, S&P 500 Index TR, and the NASDAQ 100 TR, respectively. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Kingdom Capital Advisors emphasized stocks such as United Natural Foods, Inc. (NYSE:UNFI). United Natural Foods, Inc. (NYSE:UNFI) distributes natural, organic, specialty, produce, and conventional grocery and non-food products. The one-month return United Natural Foods, Inc. (NYSE:UNFI) was -16.54%, and its shares gained 122.70% of their value over the last 52 weeks. On March 21, 2025, United Natural Foods, Inc. (NYSE:UNFI) stock closed at $26.19 per share with a market capitalization of $1.585 billion.
Kingdom Capital Advisors stated the following regarding United Natural Foods, Inc. (NYSE:UNFI) in its Q4 2024 investor letter:
“Our top contributors to Q4 returns were United Natural Foods, Inc. (NYSE:UNFI) and National Presto Industries (NPK). Another significant contributor to our 2024 performance was United Natural Foods, which I highlighted last quarter. As expected, UNFI proved their turnaround is real, achieving their expected annual cash flow improvement in just the first fiscal quarter. There are a few key levers I expect UNFI to pull, namely consolidation of their distribution centers, selling assets, and increasing margins on their operations through better supplier agreements. Food distribution peers have consistently shown 2.5% margins are achievable in this space. UNFI returning to 2.5% margins would increase EBITDA by 50% over FY24, and I think this is achievable within a couple of years. Much of this EBITDA improvement should be converted to cash, significantly improving UNFI’s balance sheet. I also love the counter-cyclicality of UNFI’s grocery distribution business, as consumers trade down from restaurants when budgets are tight. I see a clear path to UNFI’s stock doubling within the next two years if they continue to execute their turnaround strategy.”
A close-up view of organic fruits and vegetables in a local retail store.
United Natural Foods, Inc. (NYSE:UNFI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held United Natural Foods, Inc. (NYSE:UNFI) at the end of the fourth quarter which was 22 in the previous quarter. In the fiscal second quarter of 2025, United Natural Foods, Inc.’s (NYSE:UNFI) sales grew nearly 5% to $8.2 billion. While we acknowledge the potential of United Natural Foods, Inc. (NYSE:UNFI) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed United Natural Foods, Inc. (NYSE:UNFI) and shared the list of best organic food and farming stocks to invest in. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.