UFI

Unifi ($UFI) Stock Plunges 42%, But Home Depot Co-Founder Keeps Buying $228K Worth

12/02/2025 00:25

Wall Street legend Kenneth Langone continues to increase his bet on recycled fiber manufacturer Unifi ($UFI), drawing significant attention from investors. The Home Depot co-founder and major benefactor of NYU Langone Medical Center purchased approximately $41,000 worth of Unifi shares in November and made a substantial $187,000 purchase in February this year. Unifi manufactures recycled polyester fibers and nylon, serving primarily the apparel, automotive interior, and industrial textile markets. The company's flagship REPREVE brand, made from recycled plastic bottles and waste, is used by global brands including Nike and Adidas. However, recent financial performance has been challenging. Q1 fiscal 2025 revenue declined 7.9% year-over-year to $138.5 million, with a net loss of $11.4 million. Trade and tariff uncertainties have directly impacted the company's performance. The Trump administration's China tariff policies and USMCA-related trade issues have affected the entire textile industry, with Unifi being no exception. In response, the company has initiated a restructuring program and is working to reduce operational and capital expenditures. Despite these challenges, Langone's buying pattern sends an intriguing signal. He continues to accumulate shares even as the stock has fallen approximately 42% from its August 2024 peak of $7.75 to the current $4.53. His purchase timing appears strategic, concentrating on periods when the stock has declined significantly. His February purchases occurred when shares dropped to the low $5 range, while November purchases coincided with the stock hitting $3.48. Langone participated in founding Home Depot in 1974, helping build it into the world's largest home improvement retailer. His investment philosophy is known for 'holding undervalued good companies for the long term.' His continued investment in Unifi suggests potential confidence in the company's long-term value or industry outlook. The recycled fiber market has structural growth momentum alongside ESG trends. As global fashion brands increasingly demand sustainability, recycled material demand continues growing steadily. Unifi's REPREVE products have already recycled over 20 billion plastic bottles, establishing a leading position in this sector. Short-term focus should be on trade issue resolution and restructuring effectiveness. The company expects operating cash flow improvements beginning in Q2 fiscal 2026. Additionally, Unifi recently launched A.M.Y. Peppermint, a new sustainable yarn product, diversifying its product portfolio. Wall Street analysts maintain a $12 price target, suggesting 165% upside potential from current levels, though this requires fundamental improvement. Whether Langone's continued purchases represent simple 'averaging down' or confidence in fundamental improvement will be confirmed through coming quarterly results. Investors should closely monitor trade policy changes, restructuring outcomes, and recycled fiber market demand recovery pace.