This trade activity should not be overlooked: Sprouts Farmers Market Inc. (SFM)

Sprouts Farmers Market Inc. (NASDAQ: SFM) stock jumped 13.47% on Friday to $30.83 against a previous-day closing price of $27.17. With 5.75 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.86 million shares. During the session, the Grocery Stores company that operates in wider Consumer Defensive sector, reached to the highest price of $31.49 whereas the lowest price it dropped to was $29.66. The 52-week range on SFM shows that it touched its highest point at $35.34 and its lowest point at $21.18 during that stretch. It currently has a 1-year price target of $28.77. Beta for the stock currently stands at 0.42.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SFM was up-trending over the past week, with a rise of 12.27%, but this was up by 17.94% over a month. Three-month performance dropped to -1.66% while six-month performance rose 9.75%. The stock gained 30.30% in the past year, while it has gained 3.87% so far this year. A look at the trailing 12-month EPS for SFM yields 2.19 with Next year EPS estimates of 2.26. For the next quarter, that number is 0.51. This implies an EPS growth rate of -13.50% for this year and 5.85% for next year. EPS is expected to grow by 5.40% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 20.40%.

Float and Shares Shorts:

At present, 110.90 million SFM shares are outstanding with a float of 108.99 million shares on hand for trading. On Jul 14, 2022, short shares totaled 14.35 million, which was 13.09% higher than short shares on Jun 14, 2022. In addition to Mr. Jack L. Sinclair as the firm’s CEO & Director, Mr. Lawrence P. Molloy serves as its CFO & Treasurer.

Institutional Ownership:

Through their ownership of 107.11% of SFM’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 59.05% of SFM, in contrast to 46.98% held by mutual funds. Shares owned by individuals account for 16.33%. As the largest shareholder in SFM with 10.69% of the stake, BlackRock Fund Advisors holds 11,714,038 shares worth 11,714,038. A second-largest stockholder of SFM, The Vanguard Group, Inc., holds 11,052,491 shares, controlling over 10.08% of the firm’s shares. Renaissance Technologies LLC is the third largest shareholder in SFM, holding 5,898,332 shares or 5.38% stake. With a 3.20% stake in SFM, the Fidelity Low Priced Stock Fund is the largest stakeholder. A total of 3,508,294 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.95% of SFM stock, is the second-largest Mutual Fund holder. It holds 3,235,503 shares valued at 81.92 million. iShares Core S&P Mid Cap ETF holds 2.89% of the stake in SFM, owning 3,168,815 shares worth 80.23 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SFM since 19 analysts follow the stock currently. There are 4 analysts who recommend BUY ratings, while 3 suggest SELL ratings. Of the remaining analysts, 9 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 3 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SFM analysts setting a high price target of $38.00 and a low target of $21.00, the average target price over the next 12 months is $29.00. Based on these targets, SFM could surge 23.26% to reach the target high and fall by -31.88% to reach the target low. Reaching the average price target will result in a decline of -5.94% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SFM will report FY 2022 earnings on 02/23/2023. Analysts have provided yearly estimates in a range of $2.26 being high and $1.90 being low. For SFM, this leads to a yearly average estimate of $2.19. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Sprouts Farmers Market Inc. surprised analysts by $0.06 when it reported $0.57 EPS against a consensus estimate of $0.51. The surprise factor in the prior quarter was $0.07. Based on analyst estimates, the high estimate for the next quarter is $0.58 and the low estimate is $0.41. The average estimate for the next quarter is thus $0.51.

Summary of Insider Activity:

Insiders traded SFM stock several times over the past three months with 8 Buys and 3 Sells. In these transactions, 45,150 shares were bought while 30,198 shares were sold. The number of buy transactions has increased to 26 while that of sell transactions has risen to 25 over the past year. The total number of shares bought during that period was 618,160 while 198,865 shares were sold.

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