Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund returned 7.48% compared to a 10.15% return for the Russell 2000 Value Index. Year-to-date, the fund returned 8.1% compared to a 9.22% return for the index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
FPA Queens Road Small Cap Value Fund highlighted stocks like Sprouts Farmers Market, Inc. (NASDAQ:SFM) in the third quarter 2024 investor letter. Sprouts Farmers Market, Inc. (NASDAQ:SFM) is a retailer of fresh, natural, and organic food products under the Sprouts brand. The one-month return of Sprouts Farmers Market, Inc. (NASDAQ:SFM) was 23.17%, and its shares gained 249.25% of their value over the last 52 weeks. On November 7, 2024, Sprouts Farmers Market, Inc. (NASDAQ:SFM) stock closed at $140.65 per share with a market capitalization of $14.297 billion.
FPA Queens Road Small Cap Value Fund stated the following regarding Sprouts Farmers Market, Inc. (NASDAQ:SFM) in its Q3 2024 investor letter:
“Sprouts Farmers Market, Inc. (NASDAQ:SFM) is a grocer focusing on fresh, natural and organic products. The company has best in class margins, attractive returns on capital, great new store economics, and is accelerating unit growth from 12 stores a year to 35 stores in 2024 on a base of roughly 400 stores. Over the past year, the stock has performed well after reporting strong operating results and from a low initial valuation. The stock price jumped when the company reported 2023 Q4 results and gave strong 2024 guidance. The share price jumped again when they reported 2024 Q2 numbers. We have largely maintained our position and allowed it to appreciate, only beginning to trim in 2024 Q3. Although SFM’s share price has increased faster than bottom-line results, we believe SFM still trades in the “range of reasonableness” for a high-quality, non-cyclical franchise that can reinvest capital at attractive rates of return.”
A bright, colorful display of fresh produce in a grocery store.
Sprouts Farmers Market, Inc. (NASDAQ:SFM) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held Sprouts Farmers Market, Inc. (NASDAQ:SFM) at the end of the second quarter which was 32 in the previous quarter. Sprouts Farmers Market, Inc.’s (NASDAQ:SFM) third quarter sales increased by 14% year-over-year to $1.9 billion. While we acknowledge the potential of Sprouts Farmers Market, Inc. (NASDAQ:SFM) 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 Sprouts Farmers Market, Inc. (NASDAQ:SFM) and shared the list of best grocery stocks to invest. In the Q2 2024 investor letter, FPA Queens Road Small Cap Value Fund highlighted Sprouts Farmers Market, Inc.’s (NASDAQ:SFM) strong performance, citing its solid operating results, attractive valuation, and significant price appreciation. In addition, please check out our hedge fund investor letters Q3 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.