15 Best Stocks to Buy According to Jim Simons’ Renaissance Technologies

6. Sprouts Farmers Market, Inc. (NASDAQ:SFM)

Renaissance Technologies Q4 Stake: $567.3 million

Number of Hedge Fund Holders: 47

Sprouts Farmers Market, Inc. (NASDAQ:SFM) is a specialty food retailer that deals in organic and natural products. The company targets health-conscious consumers by emphasizing produce, vitamins, and private-label products across its over 400 stores throughout the United States.

Sprouts Farmers Market, Inc. (NASDAQ:SFM) announced impressive financial results for the first quarter of 2025. The company’s earnings per share of $1.81 represented a 17.5% positive surprise, exceeding the $1.54 forecast. At $2.2 billion, revenue surged 19% year-over-year, in line with projections.

On May 1, Arun Sundaram, a CFRA analyst, raised the price target for Sprouts Farmers Market, Inc. (NASDAQ:SFM) from $149 to $205 and upgraded the stock from Hold to a Buy. Sundaram supported Sprouts Farmers Market’s premium valuation based on the company’s substantial margin expansion, leading comparable sales growth, and substantial potential for new store openings. The company’s comparable sales are also expected to increase further toward the end of 2025 and into 2026 with Sprouts Farmers Market’s new loyalty program launch.

RF Capital Management stated the following regarding Sprouts Farmers Market, Inc. (NASDAQ:SFM) in its Q1 2025 investor letter:

“Sprouts Farmers Market, Inc. (NASDAQ:SFM) continues to perform well and has posted strong Q1 2025 results. QoQ, SFM’s net sales, comp store sales, and diluted EPS growth increased by 18.7%, 11.7%, and 61.6%, respectively.

The high EPS growth rate may or may not be sustainable over the long term. However, SFM is currently executing at a high level. The gross and EBIT margin profile continues to improve. SFM also continues to open new stores. For FY2025, management is projecting at least 35 new stores. This is certainly doable and is actually shy of their target store count growth rate of 10%. We would like to see them hit that target, but it’s best to be prudent going forward in the current environment.

Comparable store sales growth also looks great and comes at a time when other retailers are struggling. E-commerce sales has been growing at a high rate as well. The addition of Uber Eats as a partner has certainly helped…” (Click here to read the full text)