Food service giant Sysco (SYY - Get Report) may not be a household name, but there's a good chance that you're very familiar with the company's wares. Thats because Sysco makes the food served at more than 400,000 restaurants, hotels and institutional dining facilities around the globe. If you've dined out recently, there's a good chance that Sysco stocks the kitchen.
That hasn't stopped short sellers from unloading this name en masse. Sysco currently sports a short interest ratio of 17.67.
Sysco's status as the biggest food service distributor in North America comes with some big size advantages. Food distribution is all about the tradeoff between cost and quality -- too pricey and restaurants cant afford to stock their kitchens, too low-quality and restaurants lose with patrons. Syscos size enables it to strike the balance very well with a more effective supply chain than smaller peers.Those smaller peers are quite a bit smaller -- Sysco is five times the size of its next biggest competitor. The firm has achieved that footprint through a growth-by-acquisition strategy, buying its way into new markets that it didn't already have a foothold in. That's been an effective strategy, but it's running its course. The biggest tailwinds come from organic growth in Sysco at this point; as restaurant sales continue to tick higher into 2014, short sellers look likely to lose their battle.