Prime Capital Opens New Cava Position: Down 70%, Is the Stock a Buy?

Prime Capital Management disclosed a new position in CAVA Group, Inc. worth $32.7 million, according to its Nov. 13, 2025, SEC filing.

What happened

Prime Capital Management Co Ltd reported opening a new stake in CAVA (NYSE:CAVA), acquiring 541,330 shares valued at $32.70 million as of Sept. 30, 2025.

The disclosure, made in a Nov. 13, 2025, SEC filing, shows the CAVA position now accounts for 3.9% of the fund’s reported U.S. equity assets.

What else to know

The fund established a new position in CAVA, which makes up 3.9% of its 13F assets under management.

Top holdings after the filing:

1. Tesla (NASDAQ:TSLA): $320 million (38.5% of AUM)
2. Taiwan Semiconductor Manufacturing (NYSE:TSM): $185 million (22.3% of AUM)
3. Nvidia (NASDAQ:NVDA): $165 million (19.8% of AUM)
4. e.l.f. Beauty (NYSE:ELF): $80 million (9.6% of AUM)
5. Kinsale Capital (NYSE:KNSL): $49 million (5.9% of AUM)

As of Nov. 13, 2025, shares were priced at $48.20, down 67% over the past year and underperforming the S&P 500 by 79 percentage points.

Company Overview

Company snapshot

Cava:

• Offers Mediterranean-inspired salads, dips, spreads, toppings, dressings, and related products through its chain of restaurants and partnerships with grocery stores.
• Operates a fast-casual restaurant model, generating revenue primarily from in-store dining, online ordering, and retail distribution.
• Serves a broad customer base, including individuals seeking fresh, customizable meal options and grocery shoppers across the nation.

Cava leverages a vertically integrated approach and omnichannel distribution to expand its presence in the U.S. restaurant industry, focusing on fresh ingredients and flexible menu offerings to meet evolving consumer preferences.

Foolish take

Prime Capital's new purchase of Cava is noteworthy, if nothing else, for the fact that the firm only holds six positions.

This selective strategy may imply that they think Cava is a promising buy-the-dip opportunity, now that its stock is down 70% from its all-time high.

If that is the case, I would tend to agree with Prime.

Not only did Cava eek out same-store sales (SSS) growth of 2% in its latest quarter -- at a time when many fast-casual restaurant chains have reported substandard results -- but it did so lapping 18% SSS growth from last year.

I believe Cava has become an interesting stock, as it now trades at just 31 times cash from operations (CFO). I use this valuation to demonstrate that if the company were not opening new stores and making its capital expenditures spike, it would be reasonably valued as a growth stock.

Overall revenue growth was 20% in the last quarter, alongside an 18% increase in Cava's store count.

Best yet, 58% of the company's sales come from younger generations (Millennials and Gen Z), which points to the potential for decades of growth ahead.

Powered by these demographics and the world's continued demand for healthier food options, I have Cava on my shortlist of stocks to add to this year.

Glossary

13F assets under management: The total value of U.S. equity securities a fund must report quarterly to the SEC.
Position: The amount of a particular security or asset held by an investor or fund.
Stake: The ownership interest or share an investor holds in a company.
Top holdings: The largest investments in a fund's portfolio by value.
Fast-casual restaurant model: A dining format offering higher-quality food than fast food, with limited table service and quick service times.
Retail distribution: The process of selling products through stores or other outlets directly to consumers.
TTM: The 12 months ending with the most recent quarterly report.

Josh Kohn-Lindquist has positions in Kinsale Capital Group, Nvidia, and Tesla. The Motley Fool has positions in and recommends Kinsale Capital Group, Nvidia, Taiwan Semiconductor Manufacturing, Tesla, and e.l.f. Beauty. The Motley Fool recommends Cava Group. The Motley Fool has a disclosure policy.