Why a Fund Just Added $18.5 Million to Grocery Outlet Despite a 40% One-Year Stock Slide

3 weeks ago 18

Jonathan Ponciano, The Motley Fool

Sun, December 28, 2025 astatine 1:10 PM CST 4 min read

New York City-based Rivermont Capital Management added astir 1.1 cardinal shares of Grocery Outlet successful the 3rd quarter.
The wide presumption worth went up by an estimated $18.51 cardinal from the erstwhile period.
As of September 30, the money reported holding 1.35 cardinal GO shares valued astatine $21.67 million.
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New York City-based Rivermont Capital Management disclosed a bargain of Grocery Outlet (NASDAQ:GO) shares, expanding its presumption by astir 1.1 cardinal shares successful an estimated $18.51 cardinal presumption change, per a November 13 SEC filing.

According to a filing with the Securities and Exchange Commission dated November 13, Rivermont Capital Management accrued its holdings successful Grocery Outlet (NASDAQ:GO) by astir 1.1 cardinal shares during the 3rd quarter. The position's reported worth roseate to $21.67 cardinal arsenic of September 30, reflecting some caller stock purchases and changes successful marketplace price.

Top holdings aft the filing:

NASDAQ:STX: $35.46 cardinal (9.37% of AUM)
NYSE:FERG: $32.29 cardinal (8.5% of AUM)
NASDAQ:WTW: $29.40 cardinal (7.77% of AUM)
NYSE:CLH: $28.48 cardinal (7.5% of AUM)
NASDAQ:WDC: $27.08 cardinal (7.15% of AUM)

As of Friday, shares of Grocery Outlet were priced astatine $10.27, down astir 40% implicit the past twelvemonth and good underperforming the S&P 500, which is alternatively up astir 15%.

Metric

Value

Price (as of Friday)	$10.27
Market Capitalization	$1.01 billion
Revenue (TTM)	$4.57 billion
Net Income (TTM)	($4.44 million)

Grocery Outlet offers a wide scope of market products, including dairy, deli, produce, meat, seafood, wide merchandise, wellness and quality care, frozen foods, and brew and wine.
The institution operates a web of independently operated stores.
It appeals to consumers looking for worth successful their market purchases, with a beingness successful aggregate U.S. states.

Grocery Outlet operates hundreds of stores successful respective states by leveraging a exemplary wherever autarkic operators tally each location. The institution focuses connected offering name-brand products astatine important discounts, appealing to consumers looking for worth successful their market purchases. Its standard and sourcing strategy supply a competitory borderline successful the discount market sector.

Grocery Outlet’s banal has been chopped astir successful fractional implicit the past year, but the underlying concern is inactive growing. In the 3rd quarter, nett income roseate 5.4% to $1.17 billion, driven by caller store openings and affirmative traffic, adjacent arsenic the mean transaction size fell and margins compressed. Adjusted EBITDA came successful astatine $66.7 million, down from $72.3 cardinal past year, reflecting heavier promotions and restructuring costs tied to pruning underperforming maturation initiatives.

That backdrop helps explicate wherefore the shares are inexpensive and wherefore condemnation matters. This fund’s determination wasn’t astir momentum. It was astir standard and survivability. Grocery Outlet ended the 4th with 563 stores crossed 16 states and continues to grow selectively, portion absorption believes store refresh initiatives tin reignite same-store income successful 2026. Context matters too. The fund’s apical holdings skew toward established, cash-generating businesses alternatively than high-growth fliers. Grocery Outlet fits that mold arsenic a battered but durable relation with a differentiated discount model.