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Green Shoots at Sprouts

06/12/2020 5:00 am EST

Focus: CONSUMER

Mark Skousen

Editor, Forecasts & Strategies, High-Income Alert

Yes, we are finally starting to get back to work and while we are by no means out of the woods yet when it comes to the economic, health and social challenges ahead, the proverbial light in the tunnel is drawing nearer and nearer, asserts Mark Skousen, editor of Fast Money Alert.

Ok, now it’s time for another new buy recommendation, and this one is all about high-quality food. No, not high-quality restaurant food. We still can’t really go to restaurants like we used to.

Rather, we are talking high-quality, organic meats and foodstuffs of the sort sold at high-end boutique grocers. Specifically, we are talking about the high-quality products sold at Sprouts Farmers Market, Inc. (SFM).

This is a store that my co-editor Jim Woods shops at frequently because it sells all of the pills, potions and organic foods that help fuel his workouts.

But you don’t have to be a fitness freak to love SFM’s stock. In fact, all you have to do is be in love with the combination of the major earnings growth and strong buying in the shares.

On the earnings front, SFM has recently reported that sales across the chain rose at a brisk pace of 16% to $1.6 billion and that same-store sales spiked 10.6%. Adjusted earnings per share also surged 72% year over year.

And Wall Street loves that organic growth (pun intended) as SFM shares are up some 29% year to date (while the S&P 500 is down 8.15%).

Pandemic or no pandemic, we suspect customers will continue to shop at Sprouts, and that means more upside in sales, earnings and in the share price, as the fast money continues a flight to high quality.

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