Top 10 Stocks to Buy According to 12 West Capital Management

8. First Watch Restaurant Group, Inc. (NASDAQ:FWRG)

Number of Hedge Fund Holders as of Q4: 15

12 West Capital Management’s Equity Stake: $37.47 Million 

First Watch Restaurant Group, Inc. (NASDAQ:FWRG) operates and franchises restaurants across the United States under the First Watch brand. Headquartered in Bradenton, Florida, the company specializes in breakfast, brunch, and lunch offerings. The company’s primary source of revenue comes from food and beverage sales at its restaurants, with additional income generated through franchise fees and royalties from its franchised locations.

For the quarter ending December 2024, First Watch Restaurant Group, Inc. (NASDAQ:FWRG) reported revenue of $263.29 million, reflecting a 7.6% increase from the same period the previous year and surpassing analysts’ expectations of $262.18 by 0.43%. The company reported earnings per share (EPS) of $0.01, compared to $0.04 a year ago. However, the EPS fell short of projections, coming in 50% lower than the anticipated $0.02 per share.

Key performance metrics reported by First Watch Restaurant Group, Inc. (NASDAQ:FWRG) included same-restaurant sales growth of -0.3%, slightly outperforming the analyst consensus of -0.5%. The total number of system-wide restaurants stood at 572, aligning with analyst estimates, while franchise-owned locations remained at 83 and company-owned restaurants slightly exceeded expectations at 489, compared to the projected 488. Franchise revenue for the quarter was reported at $2.67 million, reflecting a 25.8% decline year over year and missing the projected $2.76 million. Meanwhile, restaurant sales grew by 8.1% year over year, reaching $260.63 million, exceeding the forecasted $259.43 million.

Institutional interest in First Watch Restaurant Group, Inc. (NASDAQ:FWRG) has also grown, with Insider Monkey’s data showing that 15 hedge funds held stakes in the company at the end of Q4, representing a combined value of over $115.8 million, up from 6 funds in the previous quarter. The increasing hedge fund investments reflect strong institutional confidence, reinforcing First Watch Restaurant Group’s position as a top stock to buy according to 12 West Capital Management.

Ave Maria Focused Fund made the following comment about First Watch Restaurant Group, Inc. (NASDAQ:FWRG) in its Q2 2023 investor letter:

“The Fund added three new positions in the first half of the year. Two of them are high-growth restaurant chains. First Watch Restaurant Group, Inc. (NASDAQ:FWRG) is a daytime only concept that operates in the US. The second restaurant, Alsea Group, is owner of the master franchise agreement for Domino’s Pizza in Latin America, as well as Starbucks in Latin America, Spain, and France. Both restaurant groups exhibit strong same-store sales and store-count growth as well as high returns on invested capital.”