The market, you see, is a peculiar beast. It frolics, it preens, it convinces itself of immortality. And yet, beneath the surface of this exuberant dance, the truly interesting things lurk – the undervalued, the overlooked, the companies that haven’t yet attracted the attention of the chattering classes. Everyone is currently obsessed with the digital phantoms, the AI conjurations promising untold wealth. A most amusing delusion. The valuations, naturally, reflect this collective fever dream. One begins to suspect the very air is thick with speculative bubbles.
For those with a slightly more… grounded perspective, for those who prefer to observe rather than participate in this manic spectacle, there remain opportunities. Opportunities that don’t require a pact with a dubious algorithm. Two such shadows have caught my eye: Sprouts Farmers Market (SFM +1.26%) and Remitly Global (RELY 0.77%). They are, shall we say, islands of relative sanity in a sea of algorithmic frenzy.
Sprouts Farmers Market: A Niche of Green and Quiet Profit
Sprouts, a curious enterprise. It occupies a peculiar space between the sprawling, impersonal behemoths and the ordinary grocery chains. A place where one might actually encounter a tomato that resembles a tomato. They cater to a demographic that has begun to suspect that sustenance should involve something other than processed polymers and regret. Health enthusiasts, those with a surplus of funds, and those simply weary of the bland uniformity of modern life. A small, but growing, rebellion against the tastelessness of progress.
Their revenue for the last quarter reached $2.2 billion, a respectable sum, with operational income of $157 million. Not astronomical, certainly, but solid. They operate fewer than 500 locations across 24 states, leaving ample room for expansion. A long runway for reinvestment, as the analysts say. Though, one suspects, the true measure of success isn’t merely numerical. It’s the quiet satisfaction of offering something… genuine.
New stores will naturally drive revenue and earnings. Coupled with modest same-store sales growth, they anticipate double-digit revenue growth over the next decade. And, bless their pragmatic souls, they’re returning capital to shareholders through share repurchases, reducing outstanding shares by 17% over the past five years. A sensible, unglamorous strategy. The stock has suffered a recent drawdown, due to a slowdown in same-store sales growth. A temporary blip, most likely. They’re simply emerging from an unusually strong period and should return to their long-term guidance of low single-digit comparable store sales growth. The market, of course, is rarely patient with nuance. It prefers dramatic narratives.
Currently trading at a price-to-earnings ratio of 13.8, Sprouts appears… reasonable. Not cheap, exactly, but not obscenely overpriced. It allows them to repurchase stock at a favorable price, further enhancing shareholder value. A virtuous cycle, if you will. Though, one wonders if the true reward lies not in financial gain, but in the simple pleasure of offering a decent tomato to a weary world.
Remitly Global: Navigating the Currents of Displacement
Remitly, a more complex creature. They facilitate the transfer of funds for immigrants sending money home. A vital service, often overlooked by those who dwell in comfortable abstraction. The recent anxieties surrounding stablecoins and increased scrutiny of immigration have spooked some investors. Remitly’s shares have fallen nearly 39% over the past year. A predictable reaction, given the prevailing climate of fear and prejudice.
These headwinds are worth monitoring, naturally. But they haven’t yet manifested in Remitly’s financial performance. Last quarter, revenue grew 25% year-over-year, driven by a 35% increase in send volume to $19.5 billion. A significant sum. With over $1 trillion in cross-border payments from individuals annually – and growing – Remitly remains a relatively small player. And they’re expanding into small business customers, opening up an even larger market opportunity. A sensible diversification. Though, one can’t help but wonder about the ethical implications of profiting from the displacement and hardship of others. A question best left for another day.
Currently, Remitly is barely profitable, posting net income of $8.8 million last quarter. But the unit economics are sound, and gross margins are healthy. Trading at a price-to-sales ratio under 2, it appears undervalued. For a company expecting high-teens revenue growth with significant market share left to capture, it’s a compelling valuation. A market cap of under $3 billion, with guidance for $600 million in adjusted earnings by 2028. That’s a mere 5x earnings multiple three years hence. A bargain, if you will. Though, one suspects, the true value lies not in financial metrics, but in the quiet dignity of helping those who have been forced to leave their homes.
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2026-01-25 17:23