BBB Foods: Discount Grocer At A Premium Price

(10min)

Summary

  • BBB Foods is a fast-growing Mexican retailer.
  • The company benefits from first-mover advantage in a nascent category, but it will face meaningful competition.
  • The Bulls are paying up for the growth story, with shares trading at a steep 76x forward P/E.
  • I rate TBBB as a 'Hold'. The business model is solid, but the current valuation and competitive risks temper my enthusiasm.
  • Looking for more investing ideas like this one? Get them exclusively at Ian's Insider Corner. Learn More »

supermarket clerk

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BBB Foods Inc. (NYSE:TBBB) is a Mexican hard discount retail chain. The company's name comes from the Spanish phrase "Bueno, bonito y barato" which roughly translates as "Good, nice, and affordable".

The company has been in

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This article was written by

22.84K Followers

Ian Bezek is a former hedge fund analyst at Kerrisdale Capital. He has spent the decade living in Latin America, doing the boots-on-the ground research for investors interested in markets such as Mexico, Colombia, and Chile. He also specializes in high-quality compounders and growth stocks at reasonable prices in the US and other developed markets.

Ian leads the investing group Ian's Insider Corner. Features of the group include: the Weekend Digest which covers everything from new ideas to updates on current holdings and macro analysis, trade alerts, an active chat room, and direct access to Ian. Learn More.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of FMX, WMMVY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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