Will Sysco Corporation (SYY) be Able to Reinvigorate Growth?

Oakmark Funds, advised by Harris Associates, released its “Oakmark Global Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund’s investor class returned 4.39% in the quarter compared to a -1.79% return for the MSCI World Index (net). The fund generated a 9.10% return since its inception compared to the index’s 6.21% return over the same period. The largest contributors at the sector level were financials and health care, while the largest detractors were communication services and materials. In addition, you can check the top 5 holdings of the fund to know its best picks in 2025.

In its first-quarter 2025 investor letter, Oakmark Global Fund highlighted stocks such as Sysco Corporation (NYSE:SYY). Sysco Corporation (NYSE:SYY) markets and distributes various food and related products to the food service or food-away-from-home industry. The one-month return of Sysco Corporation (NYSE:SYY) was 2.35%, and its shares lost 6.30% of their value over the last 52 weeks. On April 16, 2025, Sysco Corporation (NYSE:SYY) stock closed at $70.69 per share with a market capitalization of $34.584 billion.

Oakmark Global Fund stated the following regarding Sysco Corporation (NYSE:SYY) in its Q1 2025 investor letter:

"Sysco Corporation (NYSE:SYY) is one of the largest food service distribution companies globally. We appreciate that food service distribution is a stable industry that has historically grown slightly faster than food spending. This is because of a continued secular shift to food away from home and that scale-advantaged companies, like Sysco, benefit from better procurement terms from suppliers and demonstrate high operational efficiency. Recently, growth in the company’s largest and most profitable customer segment, independent restaurants, has slowed, but Sysco is increasing headcount and changing compensation incentives in its salesforce, which we think will reinvigorate growth and prove beneficial for long-term shareholders. In our view, Sysco remains a high-quality company with a credible management team, so we were happy to purchase shares at a discount to peers and the company’s own historical trading multiple."

Sysco Corporation (NYSE:SYY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held Sysco Corporation (NYSE:SYY) at the end of the fourth quarter which was 32 in the previous quarter. Sysco Corporation (NYSE:SYY) delivered over $20 billion of total revenue in the fiscal second quarter of 2025, a growth of 4.5% versus fiscal 2024 Q2. While we acknowledge the potential of Sysco Corporation (NYSE:SYY) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We covered Sysco Corporation (NYSE:SYY) in another article, where we shared the list of best high yield stocks for a dividend capture strategy. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.