Why a Fund Trimmed an $18 Million Stake in Primo Brands Amid a 47% Stock Drop

New York City-based Nitorum Capital disclosed a sale of 420,586 shares of Primo Brands Corporation (NYSE:PRMB), reducing its position by an estimated $18.53 million, according to a November 14 SEC filing.

What Happened

According to a filing with the Securities and Exchange Commission dated November 14, Nitorum Capital sold 420,586 shares of Primo Brands Corporation (NYSE:PRMB) during the third quarter. The fund’s stake decreased from 5.39% to 3.14% of reportable assets under management, with the remaining position valued at $17.85 million on September 30.

What Else to Know

The latest reported PRMB stake represents 3.13% of 13F AUM, which places it outside the fund’s top five holdings.

Top holdings after the filing:

• NYSE:MLM: $50.13 million (8.8% of AUM)
• NASDAQ:CHDN: $45.38 million (8.0% of AUM)
• NASDAQ:MNKD: $35.24 million (6.2% of AUM)
• NYSE:DELL: $33.38 million (5.9% of AUM)
• NYSE:RBA: $31.74 million (5.6% of AUM)

As of Tuesday, Primo Brands shares were priced at $16.36, down 47% over the past year and vastly underperforming the S&P 500, which is up 15% in the same period.

Company Overview

Company Snapshot

• Primo Brands Corporation offers bottled and purified water, sparkling and flavored water, water dispensers, filtration equipment, and coffee under multiple brands across North America and Europe.
• The company generates revenue through direct-to-consumer water delivery, water filtration services, and sales to businesses and retailers.
• It serves residential customers, small and medium-sized businesses, and large corporate and retail clients.

Primo Brands Corporation is a leading provider of water solutions, with a diversified portfolio of branded bottled water and water filtration services. The company leverages a direct-to-consumer model and a broad distribution network to reach both residential and commercial customers. Its scale and multi-brand strategy support a strong market presence in the non-alcoholic beverage sector.

Foolish Take

Nitorum’s move sends a notable signal about the investor’s confidence in Primo’s post-merger trajectory. The water company is putting up real top-line growth, reporting $1.77 billion in third-quarter net sales, up more than 35% year over year, driven largely by the BlueTriton combination. Meanwhile, adjusted EBITDA jumped to $404.5 million, and margins expanded to 22.9%, which on the surface looks like progress (from 20.2% a year earlier). The company also reaffirmed its cost synergy targets and maintained free cash flow guidance, while declaring a $0.10 quarterly dividend.

But long-term investors have to weigh those gains against what the stock is telling you. Shares are down nearly 50% over the past year, suggesting skepticism around leverage, integration risk, and earnings quality. Operating income declined year over year, and GAAP net income continues to lag adjusted figures as amortization and restructuring costs stack up. For a fund whose largest positions lean toward asset-heavy, cash-generative businesses, trimming exposure here looks less like panic and more like discipline. The takeaway isn’t necessarily that Primo Brands is broken. It's that this is no longer a sleepy staples story, and investors need to believe management can convert scale into durable free cash flow once integration costs roll off.

Glossary

13F: A quarterly SEC filing by institutional investment managers disclosing their equity holdings.
Assets Under Management (AUM): The total market value of investments managed by a fund or investment firm.
Reportable Assets: Investments that must be disclosed in regulatory filings, such as those listed in a 13F report.
Stake: The ownership interest or amount of shares held in a company by an investor or fund.
Top Holdings: The largest investments in a fund's portfolio, typically ranked by market value.
Dividend Yield: Annual dividends paid by a company divided by its share price, expressed as a percentage.
Direct-to-Consumer Model: A business approach where products are sold directly to end customers, bypassing third-party retailers.
Distribution Network: The system of channels and partners used to deliver products to customers.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MannKind. The Motley Fool recommends Churchill Downs. The Motley Fool has a disclosure policy.