Should You Invest in BBB Foods (TBBB)?
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Argosy Investors, an investment management company, released its first-quarter 2024 investor letter. A copy of the same can be downloaded here. The fund ended the first quarter with 46.4% of the portfolio in cash and short-term government bonds and year-to-date, the S&P 500 returned 10.6%. The firm stays long-term oriented, opting to invest less aggressively when possibilities are few and to invest more aggressively when opportunities are more easily identifiable in the market. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Argosy Investors highlighted stocks like BBB Foods Inc. (NYSE:TBBB), in the first quarter 2024 investor letter. BBB Foods Inc. (NYSE:TBBB) is a chain of grocery retail stores in Mexico. The one-month return of BBB Foods Inc. (NYSE:TBBB) was -4.10%, and over the last three months, its shares lost 4.19% of their value. On June 28, 2024, BBB Foods Inc. (NYSE:TBBB) stock closed at $23.86 per share with a market capitalization of $2.677 billion.
Argosy Investors stated the following regarding BBB Foods Inc. (NYSE:TBBB) in its first quarter 2024 investor letter:
"While a small position, it is worth explaining what I find attractive about BBB Foods Inc. (NYSE:TBBB). Started by a McKinsey consultant (not always a sign of an attractive investment), Tiendas BBB is a hard discounter a la Aldi or Lidl, retailers well-known in the United States. TBBB operates over 2,200 stores in Mexico, with visibility to 12,000 stores over the long-term, and I believe the potential for even more beyond that. As with Aldi, TBBB offers a limited number of primarily private label products, approx. 2,000-3,000, at less than 15% gross margins, in relatively small stores supplied by an efficient supply chain network. These metrics compare to competitors who stock tens of thousands of items, mostly third-party brands, and at gross margins >20%.
