Promethos Capital Liquidates $4 Million Sprouts Farmers Market Position: Should Investors Sell, Too?

Sprouts Farmers Market runs a national grocery chain focused on fresh, natural, and organic foods for health-conscious shoppers.What happenedAccording to an SEC filing dated Feb. 13, 2026, Promethos Capital, LLC, sold its entire holding of 34,935 shares in Sprouts Farmers Market (SFM +2.00%). The transaction’s estimated value was approximately $3.80 million, calculated using the quarterly average share price. The fund’s quarter-end position value in Sprouts Farmers Market fell by $3.80 million, a figure reflecting the sale of all SFM shares.What else to knowPromethos Capital fully exited its Sprouts Farmers Market position, which was 1.02% of the fund's AUM as of the previous quarter.Top five holdings after the filing:Taiwan Semiconductor Manufacturing: $36.10 million (10.1% of AUM)Novartis: $28.55 million (8.0% of AUM)SAP: $24.66 million (6.9% of AUM)Manulife Financial: $18.61 million (5.2% of AUM)HSBC Holdings: $15.69 million (4.4% of AUM)As of Feb. 13, 2026, Sprouts Farmers Market shares were trading at $68.96, down 60.9% over the past year and underperforming the S&P 500 by 73 percentage points.Company overviewMetricValueRevenue (TTM)$8.65 billionNet income (TTM)$513.45 millionMarket capitalization$6.71 billionPrice (as of market close February 13, 2026)$68.96Company snapshotSprouts Farmers Market:Offers fresh produce, meat, seafood, bakery, deli, dairy, grocery, vitamins, supplements, and natural health products, with a focus on natural and organic foods.Operates a network of retail grocery stores, generating revenue primarily through in-store sales of perishable and non-perishable food items.Targets health-conscious consumers and families seeking natural, organic, and specialty food products nationwide.Sprouts Farmers Market is a leading U.S. grocery retailer specializing in fresh, natural, and organic foods, with 464 stores across 24 states. The company leverages a differentiated product assortment and a focus on health and wellness to attract a loyal customer base.What this transaction means for investorsPromethos Capital originally purchased Sprouts Farmers Market for around $48 per share back in Q4 of 2023. It added to its holdings again two quarters later, before selling roughly half its shares in the specialty grocery after the price more than doubled. Over the next year, Sprouts’ stock would keep rising to over $160 per share. However, over the last six months, Sprouts’ share price has plummeted 53% and Promethos appears to be done with the stock (at least temporarily).While we don’t know the firm’s rationale for selling its position, I’m only interested in adding to Sprouts Farmers Market at today’s valuation. Currently trading at just 13 times earnings and 15 times free cash flow (FCF) -- despite spending on capex for new store growth -- Sprouts’ steady growth over the last decade is deeply discounted, in my opinion. Home to 464 stores in 24 states, the company is actively expanding into 9 new states and believes it has the potential to reach 1,400 locations over the long haul.Aside from the growth story, I really like the company’s differentiation. For example, 70% of its products are attribute-driven -- kosher, organic, non-GMO, gluten-free, vegan, etc. -- letting the company stand out from traditional mega-grocers. Furthermore, Sprouts is an innovation machine, constantly bringing in new healthy product ideas to test out. The company introduced 7,100 new items and launched 300 private-label products in 2024, helping it to continuously find the “next big thing.” While I understand Promethos Capital’s decision to sell the stock amid its volatility, especially since it was a winning pick for them, I would only consider buying the company today as it continues to grow its geographic footprint, profitability, and sales by 10% annually over the last decade.About the AuthorJosh Kohn-Lindquist is a contributing Motley Fool stock market analyst covering consumer goods, industrials, and technology stocks. Previously, Josh was a senior mutual fund accountant at Gemini Fund Services. He holds a bachelor’s degree in business management from the University of South Dakota.TMFJorykoX@JorykoliStocks MentionedSprouts Farmers MarketNASDAQ: SFM$68.98 (+2.00%) $+1.35*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.