USFD

US Foods Holding Corp

Consumer, Event Driven/Special Sit


Presented:06/22/2020
Price:$19.10
Cap:$4.21B
Current Price:$62.54
Cap:$15.29B

Presented

Date06/22/2020
Price$19.10
Market Cap$4.21B
Ent Value$8.95B
P/E Ratio23.12x
Book Value$16.28
Div Yield0%
Shares O/S220.28M
Ave Daily Vol4,781,014
Short Int2.13%

Current

Price$62.54
Market Cap$15.29B
US Foods Holding Corp. operates as a foodservice distributor. Its products include frozen and dry food and non-food products to foodservice customers throughout the U.S. The company offers services under brands Chef's Line, del Pasado, Glenview Farms, Cattleman's Selection, Cross Valley Farms, Harbor Banks, Hilltop Hearth, Devonshire, and Metro Deli. The company is headquartered in Rosemont, IL.

Publicly traded companies mentioned herein: KKR & Co Inc (KKR), US Foods Holding Corp (USFD)

Highlights

The presenter is long shares of US Foods Holding Corp (USFD). While he likes all of the food distributors, he believes that USFD has the most upside partially due to the company’s leverage (4.5x). His view is that over the next 12 -18 months, the amount spent on “food away from home” will be relatively unchanged from where it was in 2019 (i.e., we haven’t seen a structural shift to people eating at home more). While timing is uncertain, he believes that USFD will get back to what their normalized earnings were in 2019 or about ~$1.3B in EBITDA. On that number, USFD is currently trading at 7.5x EBITDA. Historically, it has never traded below 8.5x and pre-COVID-19 it was trading at 10x - 10.5x. Taking that pre-virus multiple he arrives at a share price in the low-$30s. 

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Idea Discussion

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