US Foods Holding Corp.
Thesis
We recommend a long position in US Foods, which operates in a recession-resistant industry and has strong competitive advantages. The stock has recently declined over 30% due to operational challenges, but we believe that with activist involvement, the implied IRR can be improved from 23% to 33%.
Did it work?
The long thesis in US Foods played out decisively: the stock returned +181.8% over the 88 months since the pitch, strongly validating the bullish direction. The core thesis elements — a depressed stock with recovery potential and activist involvement driving operational improvement — materialized, as activist pressure did arrive and the shares re-rated well beyond the initial decline. With over seven years elapsed and a large positive return in the stated direction, the outcome is clear.