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Should You Add United Natural Food Holdings (UNFI) to Your Portfolio?

Miller Value Partners, an investment management company, released its “Deep Value Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The second quarter saw the continuation of the narrow leadership in the equities market, with smaller cap and lower value indices lagging behind the broader market. In contrast, the majority of large-cap indexes had positive gains. In the second quarter, Strategy returned 12.84% (net of fees) well ahead of S&P 1500 Value Index’s -2.25 % return and the S&P 600 Value Index’s -4.85% returns. The strategy returned 15% (net of fees) year to date, compared to 5.17% and -4.72% returns for the indexes. The strategy benefitted from its very high active share in Q2. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Miller Value Deep Value Strategy highlighted stocks like United Natural Foods, Inc. (NYSE:UNFI) in the second quarter 2024 investor letter. United Natural Foods, Inc. (NYSE:UNFI) distributes natural, organic, specialty, produce, and conventional grocery and non-food products. The one-month return of United Natural Foods, Inc. (NYSE:UNFI) was -1.17%, and its shares lost 33.35% of their value over the last 52 weeks. On July 16, 2024, United Natural Foods, Inc. (NYSE:UNFI) stock closed at $13.51 per share with a market capitalization of $803.441 million.

Miller Value Deep Value Strategy stated the following regarding United Natural Foods, Inc. (NYSE:UNFI) in its Q2 2024 investor letter:

“During the quarter, we initiated a position in United Natural Foods, Inc. (NYSE:UNFI). The nearly 50-year-old company appears to be a significantly mispriced leading national food distribution company. UNFI share price is down nearly 80% from its former high, as the company experienced recent margin pressure from rising inflation and operating inefficiencies. New management has recently joined the company, including Matteo Tarditi, who came from GE where he helped spearhead the company’s successful transformation. UNFI’s transformation plan over the next couple of years will focus on maximizing their market leading position in natural and specialty foods along with supporting the growth of independent retail chains. The company announced it will be rolling out six sigma/lean initiatives to help drive operating efficiencies in their national distribution footprint, which supports >$30B of annual revenue from 30,000 customers in all 50 states and 10 Canadian providences. UNFI is also expanding higher margin services to their customers which have long-term grow potential and should further support the company’s profitability improvement initiatives. As cost efficiencies continue to be realized over the coming years, United Natural Foods has the potential for margins to improve from historical trough levels towards industry peers. With a multi-year transformation there is always risk of short-term disruption to operations as management undertakes new initiatives to improve the company’s long-term profitability. However, we believe UNFI’s extensive distribution network provides a significant margin safety. UNFI own’s 13M square feet of distribution center and warehouses which is a significant “hidden” asset.”

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 31 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held United Natural Foods, Inc. (NYSE:UNFI) at the end of the first quarter which was 29 in the previous quarter. During the fiscal third quarter of 2024, United Natural Foods, Inc. (NYSE:UNFI) achieved a free cash flow of around $49 million, which enabled the company to lower its net debt by $30 million. 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 FPA Queens Road Small Cap Value Fund’s views on the company. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
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Trump has made it clear: Europe and U.S. allies must buy American LNG.

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As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

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AI needs energy. Energy needs infrastructure.

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Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

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The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

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Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
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  • A surge in U.S. LNG exports
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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…