| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 11.3% | 12.28% | 18% |
SouthernSun's SMID Cap strategy returned 12.28% net in Q2 2026, underperforming the Russell 2500's 20.26% return as the market favored AI-exposed technology and industrial names. The manager deliberately took profits in AI holdings and maintains underweight exposure to the data center buildout, questioning whether market concentration represents correctable imbalance or dangerous structural instability. Top contributors included Extreme Networks, which delivered its fifth consecutive quarter of double-digit growth with accelerating SaaS adoption, and Generac Holdings, which significantly exceeded expectations driven by Commercial & Industrial segment strength and emerging hyperscale data center opportunities. Darling Ingredients declined after strong Q1 performance due to falling oil prices from Iran conflict resolution, though fundamentals and EPA mandate support remain intact. Broadridge fell despite solid results on AI disruption fears the manager views as overstated. The team conducted extensive field research across industrial conferences and continues evaluating niche industrials, building products, and out-of-favor consumer discretionary opportunities. The manager emphasizes their decades-long process of grounding conviction in fundamentals rather than sentiment remains unchanged regardless of market conditions.
SouthernSun maintains a disciplined, research-intensive approach to SMID cap investing, focusing on niche-dominant companies with strong fundamentals rather than chasing speculative growth themes like the AI buildout that dominated Q2 2026 market performance.
The manager remains encouraged by portfolio company fundamentals despite macroeconomic choppiness. They express uncertainty about whether current market concentration in AI represents a correctable imbalance or a more dangerous structural instability, preferring to maintain disciplined positioning rather than chase momentum. The research process continues to focus on bottom-up, boots-on-the-ground analysis across niche industrials, building products, and out-of-favor consumer discretionary companies. The manager emphasizes that their decades-long process of re-evaluating holdings, holding new ideas to high standards, and grounding conviction in fundamentals rather than sentiment does not change with market conditions.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 20 2026 | 2026 Q2 | BCO, BR, CXT, DAR, EXTR, GNRC, LOB, SAM, USPH, VMI | AI, Bottom-up Research, Concentration risk, Data centers, industrials, SMID Cap, value |
EXTR GNRC DAR BR |
SouthernSun underperformed in Q2 2026 by avoiding speculative AI concentration that drove index returns. The manager took profits in AI names and maintains disciplined underweight positioning, questioning market stability. Strong results from Extreme Networks and Generac were offset by Darling's oil-price-driven decline and Broadridge's AI-fear selloff. Extensive field research continues across niche industrials and out-of-favor opportunities, with conviction grounded in fundamentals not sentiment. |
| Feb 25 2026 | 2025 Q4 | APG, BOOT, CXT, DAR, DY, EXTR, FND, GNRC, LOB, MUSA, OSK, TKR, TREX, WSO | AI, energy, infrastructure, Late-cycle, SMID Cap, valuation, value |
DAR APG CXT GNRC OSK LOB EXTR DY TKR TREX |
SouthernSun draws parallels between today's AI euphoria and 2014-15 oil collapse, warning that AI's physical constraints and elevated valuations create repricing risk. Q4 underperformed with -3.89% net returns, but the manager sees compelling opportunities in overlooked areas while maintaining discipline around intrinsic value and balance sheet strength in this late-cycle environment. |
| Oct 30 2025 | 2025 Q3 | BCO, CXT, DAR, FND, GNRC, MOD, MUSA, NGVT, SEIC, VMI, WSO | active management, fundamentals, Quality, SMID Cap, Stewardship, value |
MOD BCO DAR WSO CXT MOD BCO DAR WSO CXT |
SouthernSun's SMID Cap strategy returned 7.96% net in Q3 2025, driven by Modine Manufacturing and Brinks Company while Darling Ingredients detracted. The firm champions active management over passive indexing, focusing on quality companies with strong balance sheets and niche dominance. Despite geopolitical risks and market concentration concerns, they maintain disciplined value investing with cautious optimism. |
| Jul 17 2025 | 2025 Q2 | APG, BOOT, DAR, DY, LPX, MOD, MSA, MUSA, SAM, TREX, WSO | Agriculture, Building Products, Resilience, Safety, SMID Cap, tariffs, technology, value |
APG BOOT WSO SAM MSA APG BOOT WSO SAM MSA |
SouthernSun's SMID Cap strategy outperformed in Q2 2025 with 10.34% net returns, driven by companies demonstrating operational resilience and capital discipline. Portfolio benefits from share buyback acceleration, tariff adaptation strategies, and market share gains through innovation. Housing and agriculture face rate-driven headwinds while safety and specialty retail show strength. M&A activity expected to increase. |
| Apr 25 2025 | 2025 Q1 | AEIS, AGCO, AWI, BDC, BOOT, BR, DHR, GNRC, IEX, MOD, PII, SAM, TKR, USPH, WSO | fundamentals, Quality, Resilience, small caps, SMID Cap, tariffs, Trade Policy, value |
BR WSO BOOT USPH PII MOD |
SouthernSun sees small-cap opportunity as markets shift from speculative excess to fundamentals-focused investing. Their SMID strategy targets resilient U.S. companies with strong balance sheets and pricing power. While tariffs create near-term volatility, potential trade policy shifts toward domestic production and growth-to-value rotation could benefit quality small caps. Current dislocation offers compelling entry points for patient investors. |
| Dec 31 2024 | 2024 Q4 | APG, AWI, BCO, BR, DY, MGPI, PII, SEIC, TKR, USPH | Balance Sheet, Cyclical, management, Patience, Research, SMID Cap, value |
SEIC AWI MGPI BCO |
SouthernSun's SMID Cap strategy underperformed in Q4 2024 but demonstrated disciplined capital allocation by exiting deteriorating positions like MGPI while benefiting from strong performers like SEI and Armstrong. The firm maintains cautious optimism for 2025, focusing on durable businesses with strong management teams while navigating policy uncertainty and market speculation through fundamental research and patient capital deployment. |
| Sep 30 2024 | 2024 Q3 | APG, BOOT, GNRC, IDXX, LPX, NGVT, USPH | - | - | |
| Jul 20 2024 | 2024 Q2 | AGCO, BCO, BOOT, DAR, DY, MUSA, PII, TREX, USPH, VMI | fundamentals, long-term, Patience, Research, small cap, SMID Cap, value |
BOOT DY DAR USPH |
SouthernSun's SMID cap strategy outperformed benchmarks in Q2 2024 despite a challenging environment. The firm believes economic weakness is priced into small caps, creating attractive opportunities for patient investors. They focus on secular growth areas like broadband infrastructure and depressed sectors like chemicals, emphasizing deep research and long-term value creation through fundamental analysis. |
| May 17 2024 | 2024 Q1 | AWI, BDC, BOOT, BR, DAR, DY, MGPI, SAM, THO, USPH | Concentration, long-term, Quality, small cap, SMID Cap, value |
DY BOOT MGPI SAM |
SouthernSun sees opportunity in marginalized small and SMID-cap equities despite sector headwinds from peak margins and debt burdens. Their concentrated portfolio approach focuses on quality businesses like fiber infrastructure provider Dycom and western retailer Boot Barn. The firm believes current market dislocations create attractive entry points for patient capital with long-term perspective. |
| Feb 15 2024 | 2023 Q4 | AWI, BCO, BDC, BOOT, BR, DY, FND, LPX, MGPI, PII, SAM | Construction, consumer, industrials, Onshoring, SMID Cap, Telecommunications, value |
ABDY.L AER|AWI|MUSA|NEU|SAIA|WTM BBDC4.SA SAM ADI|BDX|FI|FND|HAS|META|MSFT|MSI|ORCL|TMO |
SouthernSun's SMID Cap strategy outperformed in 2023 despite macro volatility, with strong contributions from fiber infrastructure and building materials companies. The managers see portfolio businesses as fundamentally underappreciated and favor companies with strong balance sheets and adaptive management teams positioned to benefit from onshoring trends and infrastructure spending while navigating 2024's geopolitical uncertainties. |
| Sep 30 2023 | 2023 Q3 | BCO, BDC, BR, DAR, DY, LPX, MUSA, SAM, TKR, USPH | Biofuels, Convenience Stores, self-help, SMID Cap, Telecommunications, value |
SAM AER|AWI|MUSA|NEU|SAIA|WTM ABDY.L ALDAR.AD |
SouthernSun's SMID Cap strategy delivered -6.05% in Q3 but maintains strong trailing performance. The firm completed leadership transition to employee ownership while focusing on self-help stories like Boston Beer and Murphy USA. Despite macro headwinds including elevated cash yields and small cap underperformance, management sees opportunity in market dislocation for patient fundamental investors. |
| Feb 8 2023 | 2023 Q2 | AGCO, DY, IEX, MGPI, MUSA, NGVT, SAM, THO, TREX, UNVR, USPH, WRK | Chemicals, concentrated, healthcare, SMID Cap, Spirits, Telecommunications, value | - | SouthernSun's concentrated SMID cap strategy delivered 11.04% net returns in Q2 2023, outperforming benchmarks through disciplined focus on financial flexibility, management adaptability, and niche dominance. Key positions include Dycom benefiting from fiber infrastructure runway and new additions in physical therapy and premium spirits markets with strong demographic and generational tailwinds. |
| Apr 30 2023 | 2023 Q1 | AGCO, BCO, BOOT, CLH, CR, DAR, LPX, MUSA, TKR, TREX, WRK, WSO | Building Products, HVAC, Industrial, M&A, packaging, SMID Cap, value |
WSO BCO ALDAR.AD WRK LPX |
SouthernSun outperformed in Q1 despite banking volatility and economic uncertainty. Strong contributors in HVAC distribution and cash management services offset weakness in packaging. The team rotated capital from mature positions into Louisiana-Pacific's building products transformation story. Manager remains selective on valuations while finding overlooked opportunities with strong fundamentals and competitive advantages. |
| Apr 30 2022 | 2022 Q1 | AGCO, COOK, DAR, SCL, THO, TMX | Agriculture, consumer, energy, Manufacturing, small cap, value |
AGCO DAR THO SCL TMX COOK |
SouthernSun's small cap strategy outperformed in a challenging Q1 2022, driven by agricultural equipment and renewable energy holdings. The firm maintains disciplined, research-intensive approach with concentrated positions in niche-dominant companies. Recent portfolio moves include exiting Terminix due to foreign acquisition and adding Traeger as a category-leading consumer brand with strong competitive moats. |
| - | 2021 Q1 | AEGN, AGCO, BR, CASS, DAR, EGOV, FHN, FTDR, MIDD, NGVT, PII, SFD, STAY, THO, TMX | execution, Generalist, portfolio, Quality, small cap, value |
THO PII TMX CASS |
SouthernSun's small cap value strategy delivered strong Q1 returns driven by Thor Industries and Polaris. The fund added Cass Information Systems while exiting two positions for capital redeployment. Management expects ongoing market transitions between size and style factors to favor their niche-dominant portfolio companies that execute well during uncertain periods. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIThe manager acknowledges AI as a dominant market driver in Q2 2026, particularly benefiting technology and industrial companies tied to the AI arms race. They took profits in AI-exposed names during the quarter and maintain meaningful but underweight exposure to the AI data center buildout relative to the index. The manager uses sailing metaphors to question whether AI concentration represents a correctable imbalance or a more dangerous structural instability. |
Data Centers Technology Industrials Concentration |
Data CentersData center exposure is discussed as a key growth driver for portfolio companies Generac and Extreme Networks. Generac is in final stages of vendor qualification with hyperscale customers and seeing backlog expansion for data center products. The manager views this as a durable multi-year opportunity but maintains underweight positioning relative to the index on the AI data center buildout theme overall. |
AI Hyperscale Power Equipment Cloud Infrastructure | |
Renewable ComponentsDarling Ingredients, a leading producer of renewable energy from edible by-products, saw share price decline in Q2 after strong Q1 performance. The fundamentally improved earnings trajectory from EPA renewable fuel volume mandates remains intact. The decline was attributed to falling crude oil prices due to Iran conflict resolution, which reduced substitution value for renewable aviation fuel, though volume outlook remains unaffected by oil prices. |
Biofuels Energy Transition Sustainable Aviation Fuel Oil | |
Industrial MachineryThe manager conducted extensive field research on industrial companies including MSA Safety and Oshkosh Corp at industry conferences. They focused research time on niche industrial companies and makers of low-cost but critical components. Industrial sector performance was strong, particularly in electrical equipment and construction engineering subsegments, though the manager remains relatively underweight speculative growth in this area. |
Industrial Safety Construction Equipment Electrical Equipment Niche | |
NetworkingExtreme Networks was a top contributor, delivering fifth consecutive quarter of double-digit revenue growth with 11.4% year-over-year increase. The company's transition to subscription-based model is gaining durable momentum with SaaS ARR growing 28.6% and reaching 36% of total revenue. The ongoing Wi-Fi 7 hardware refresh cycle and Platform ONE adoption acceleration position the company well for continued share gains. |
WiFi SaaS Cloud Enterprise Software | |
Power EquipmentGenerac Holdings significantly exceeded expectations with Q1 2026 results showing 12% sales growth and 43% EPS increase. The Commercial & Industrial segment drove upside with 28% sales growth, particularly from industrial distributor and rental channels. Management raised full-year guidance and completed acquisition of Enercon Services to deepen vertical integration for data center backup power solutions, representing a durable multi-year growth driver. |
Data Centers Industrial Distribution Energy Storage Backup Power | |
| 2025 Q4 |
AIAI occupies a central role similar to oil in 2014-15, with markets extrapolating favorable environments too far. AI infrastructure is profoundly energy-intensive with rising electricity prices and grid constraints challenging assumptions of frictionless scalability. Valuation multiples assume near-flawless execution while physical and regulatory constraints complicate the path forward. |
Artificial Intelligence Data Centers Energy Infrastructure Valuations Technology |
EnergyEnergy plays a crucial role in AI infrastructure economics, with data centers becoming massive electricity consumers. Rising power costs compress margins while grid constraints and regulatory scrutiny introduce deployment delays and uncertainty that challenge AI scalability assumptions. |
Electricity Power Pricing Grid Infrastructure Data Centers Utilities | |
ValuationsMany AI-exposed companies trade at multiples assuming near-flawless execution, creating conditions reminiscent of late-cycle environments. Markets forgive delays and cost overruns when confidence is high, but these same factors can catalyze abrupt repricing when confidence wanes. |
Multiples Execution Risk Market Confidence Repricing Late Cycle | |
| 2025 Q3 |
Active ManagementSouthernSun emphasizes the enduring value of active management in an increasingly passive world, arguing that active investing restores balance by engaging directly with management, questioning assumptions, and allocating capital purposefully rather than automatically. They view active management as essential stewardship that combines analytical rigor with human judgment. |
Active Management Stewardship Capital Allocation Engagement Discovery |
ValueThe firm maintains its disciplined approach to valuation, seeking companies with genuine margins of safety and focusing on long-term value creation over short-term market movements. They emphasize that value, properly understood and patiently pursued, remains constant despite market volatility. |
Value Valuation Discipline Margin of Safety Long-term Fundamentals | |
QualitySouthernSun's investment philosophy centers on four pillars including financial flexibility, management adaptability, niche dominance, and valuation discipline. They seek companies with strong balance sheets, aligned management teams, transparent governance, and enduring competitive moats that can weather cycles of ambiguity. |
Quality Financial Flexibility Management Competitive Moats Balance Sheets | |
| 2025 Q2 |
ResilienceCompanies demonstrated operational discipline through cost consciousness, margin stewardship, and capital discipline. Management teams acknowledged macroeconomic uncertainties while maintaining steady execution and preparing deliberately for challenges. |
Operational discipline Cost management Margin preservation Capital allocation Adaptability |
BuybacksVolatility year to date provided opportunities for several companies to more aggressively utilize existing and initiate new share repurchase programs. Cash is king again with companies focusing on shareholder return through repurchase programs. |
Share repurchases Capital allocation Shareholder returns Cash deployment Volatility opportunity | |
Trade PolicyTariffs re-emerged as a significant cost driver, prompting companies to explore reshoring, leaner inventories, and domestic sourcing. The Big Beautiful Bill adds complexity particularly touching manufacturing, infrastructure, and corporate tax policies. |
Tariffs Reshoring Domestic sourcing Supply chain Policy impact | |
Building ProductsHousing sector continues to feel the bite of higher rates, especially residential new construction. Several building products businesses are taking share from smaller competitors through innovation, new product introductions and expanded distribution. |
Housing Construction Market share Innovation Distribution | |
AgricultureFarmers pressured by commodity prices and rates as well as trade policies are breaking even and not in a position to invest meaningfully in equipment or infrastructure. This dynamic is weighing on many Ag-related businesses. |
Commodity prices Equipment Infrastructure Trade policies Investment pressure | |
| 2025 Q1 |
Small CapsThe manager believes small- to mid-cap U.S. companies with strong fundamentals are poised to shine as the market transitions from speculative excess to substance-focused investing. They see this as a shift from a sugar high to a carnivore diet - stripped of fluff and rooted in what's healthy and enduring. |
SMID Cap Russell 2000 Russell 2500 Fundamentals Quality |
ValueThe firm anticipates a potential growth-to-value rotation that could spotlight small and mid caps, similar to the post-2002 period. They believe the market's sugar high is waning and entering a leaner era focused on substance over speculation. |
Value Rotation Fundamentals Substance Quality Valuation | |
Trade PolicyTariffs, particularly with China, present both near-term risks and longer-term opportunities. While tariffs could hit margins in the next 6-18 months, a reordered marketplace with trade tilting back to U.S. domestic production could be transformative for small caps with pricing power. |
Tariffs China Domestic Production Supply Chains Reshoring | |
OnshoringThe manager sees potential for a decade where small caps become linchpins in a reshored economy. Trade flows reorienting toward U.S. shores could drive M&A activity and benefit companies with operational flexibility and strong balance sheets. |
Reshoring Domestic Production Manufacturing Supply Chains M&A | |
ResilienceThe investment philosophy centers on companies with financial backbone, market strongholds, and leadership to endure through storms and seasons. The firm seeks businesses that can flex rather than fracture during difficult periods. |
Balance Sheets Cash Flow Durability Operational Excellence Leadership | |
| 2024 Q4 |
Trade PolicyThe U.S. presidential election outcome led to market anticipation of policy shifts towards tax extensions and deregulation, viewed as pro-growth. However, potential new trade policies, particularly tariffs, introduced elements of uncertainty that the firm closely monitored. Global trade adjustments, particularly with major economies like China, continue to shape investment decisions. |
Tariffs Deregulation Tax China Policy |
RatesThe Federal Reserve cut interest rates again during Q4, signaling a cautious yet proactive stance against slowing economic growth. This move influenced both credit and equity markets, which have been volatile as markets speculate about Fed actions in 2025. The firm is preparing for a nuanced environment where inflation could either spike or stabilize. |
Fed Interest Rates Inflation Credit Volatility | |
| 2024 Q2 |
BroadbandStrong demand outlook for fiber construction in urban areas as carriers generate good returns on fiber investments. Public funding through ARPA, RDOF, and BEAD programs provides additional significant demand, with the $40 billion BEAD program being the largest federal broadband program ever in the U.S. Deployment expected to start in 2025. |
Fiber Infrastructure BEAD Telecommunications Construction |
Energy TransitionDarling Ingredients is constructing sustainable aviation fuel (SAF) capacity expected to come online in Q4 2024 and evaluating further SAF expansion. Growth and incentives in the SAF market provide significant margin expansion and return on investment opportunities. |
Sustainable Aviation Fuel Renewable Energy Biofuels Energy Storage Clean Technology | |
SemiconductorsSemiconductor industry identified as a focus area with secular tailwinds expected to benefit from long-term structural trends. The sector represents one of the key growth opportunities in the current market environment. |
Chips Technology Electronics Manufacturing Innovation | |
Infrastructure SpendingPower infrastructure identified as having secular tailwinds and expected to benefit from long-term structural trends. HVAC industries also highlighted as benefiting from infrastructure-related growth opportunities. |
Power Construction Utilities Government Investment | |
| 2024 Q1 |
TelecommunicationsFiber construction demand remains bright with private equity investment and public funding through ARPA, RDOF, and BEAD programs. The $40 billion BEAD program is expected to begin deployments in 2025, providing multi-year tailwinds. With only 43% of US homes passed with fiber, there is a long runway for penetration. |
Fiber Infrastructure BEAD Telecommunications Construction |
RetailWestern and work-related retail shows expansion potential with Boot Barn planning to grow from 380 stores to approximately 900 stores over several years. Management demonstrates ability to increase gross margins through higher-margin proprietary brands while maintaining balance sheet discipline. |
Western Retail Store Expansion Proprietary Brands Gross Margin Retail | |
Distilled SpiritsThe distilled spirits industry shows shift toward new distillate sales which provide greater cash flow visibility despite lower margins. Premium and ultra-premium branded spirits segments offer growth opportunities with margin expansion potential as companies build out their portfolios. |
Distilled Spirits Premium Brands Cash Flow Margin Expansion Branded Spirits | |
| 2023 Q4 |
OnshoringCompanies continue to adapt to security of supply, labor, and technology adoption issues through on-shoring, re-shoring, and near-shoring strategies. With escalation of armed regional conflicts impacting shipping and supply chains, companies are aggressively evaluating and adjusting their strategies to ensure competitive advantages. |
Supply Chain Manufacturing Security Geopolitical |
Infrastructure SpendingDycom Industries benefits from fiber deployment with only 43% of US homes passed with fiber, creating a long runway for penetration. Government funding from the $40 billion BEAD program is expected to start deployment, with customers increasing their pace of fiber deployment. |
Fiber Telecommunications Government Funding BEAD | |
AutomationBelden continues to benefit from growth in industrial automation, 5G deployment, and environments increasingly dependent on high quality, reliable networks. The company showcased meaningful interest from global partners including Amazon Web Services and automobile manufacturers. |
Industrial 5G Networks Manufacturing | |
| 2023 Q3 |
Convenience StoresMurphy USA benefits from its position as a low-cost, high-volume fuel retailer with advantaged locations on Walmart outparcels. The company continues to grow same-store sales and sees opportunities for new store additions while maintaining capital discipline through share repurchases. |
Fuel Retail Walmart Margins Growth |
Telecommunications InfrastructureDycom Industries provides engineering and construction services for telecommunications and utility industries. Despite near-term moderation from large customers, the company expects strong 2024 demand driven by unprecedented government funding through ARPA, RDOF, and BEAD programs for fiber network expansion. |
Fiber Construction Government Infrastructure 5G | |
Sustainable Aviation FuelDarling Ingredients is constructing SAF capacity expected online in Q4 2024 and evaluating further expansion. The company sees significant margin expansion and return on investment opportunities in the SAF market as growth and incentives provide attractive economics. |
Biofuels Aviation Renewable Capacity Margins | |
| 2023 Q2 |
Telecommunications InfrastructureFiber penetration has significant runway with only 43% of US homes passed by high-speed fiber cable. Government funding through ARPA, RDOF, and BEAD programs is making previously uneconomical rural and low-income areas viable for fiber deployment. Industry capacity remains tight with strong demand from smaller customers. |
Fiber Telecommunications Infrastructure Government Funding Rural Broadband |
Specialty ChemicalsRaw material cost pressures from elevated crude tall oil prices due to increased biodiesel demand. Companies developing alternative fatty acid capabilities and opportunities to shift products into growing biodiesel markets. Automotive activated carbon products expected to benefit from global production recovery. |
Crude Tall Oil Biodiesel Activated Carbon Automotive Raw Materials | |
Physical TherapyHighly fragmented $30+ billion US market expected to grow as population becomes more active and ages. Medical providers and insurers recognizing benefits of physical therapy for better outcomes and lower costs. Multiple growth opportunities through increased visits per clinic, new clinics, and acquisitions. |
Healthcare Aging Population Fragmented Market Outpatient Rehabilitation | |
Distilled SpiritsUS spirits gaining significant share of total beverage alcohol over the last decade. American whiskey volumes experiencing strong growth driven by craft brands. Generational consumption trends suggest sustainable demand. Time and capital required for aging creates barriers and unique market positioning opportunities. |
Bourbon Whiskey Craft Spirits Aging Distribution | |
| 2023 Q1 |
Building ProductsManager initiated position in Louisiana-Pacific Corporation, a leading producer of oriented strand board and siding. The company has transformed from commodity OSB focus to value-add building solutions with superior growth profile and barriers to entry in siding business. |
OSB Siding Construction Housing Materials |
HVACWatsco was top contributor, delivering record sales and earnings growth. The business is 80% repair and replace driven, providing stability. Management continues investing in proprietary technology solutions despite near-term profitability burden. |
Air Conditioning Heating Distribution Technology | |
Industrial ServicesBrink's delivered strong organic growth in cash management and digital retail solutions. The company is expanding higher-margin services globally while the manager believes cash will remain relevant long-term despite market skepticism. |
Cash Management Digital Solutions ATM Services | |
Renewable ComponentsDarling Ingredients was top detractor despite record EBITDA. The company is investing heavily in sustainable aviation fuel and renewable diesel production, strengthening vertical integration while increasing debt levels to over 3x. |
Renewable Diesel Aviation Fuel Sustainability | |
PackagingWestRock reported below-expectations results with weakness in global paper segment due to poor export demand. However, the manager believes the company operates a resilient business model with diverse end market exposure and strong free cash flow generation. |
Corrugated Consumer Packaging Paper | |
| 2022 Q1 |
Ag EquipmentAGCO Corp reached record sales of $11.1 billion with strong global demand for agricultural equipment. The company is well positioned to meet high global demand through their Farmer-First strategy centered on Precision Ag, despite supply chain challenges and material cost inflation. |
AGCO Precision Equipment Global Demand |
BiofuelsDarling Ingredients drove record EBITDA of $1.235 billion with their Diamond Green Diesel joint venture selling 370 million gallons of renewable diesel. The company acquired Valley Proteins for additional low carbon feedstock and expects 25% EBITDA growth in 2022. |
Renewable Diesel Feedstock EBITDA Growth | |
TravelThor Industries generated record results with over 300,000 RV units sold and earnings of $11.85 per share in fiscal 2021. Management believes demand for the RV lifestyle will remain long into the future despite economic downturn risks affecting near-term sentiment. |
RVs Lifestyle Demand Recreation Travel | |
| 2021 Q1 |
Small CapsManager expects market transitions between large versus small, growth versus value to favor their small cap portfolio businesses. When management teams distinguish themselves through excellence in execution, equity sponsorship becomes more reflective of fundamental long-term value during these transitions. |
Small Cap Value Execution Transitions |
ValueFund focuses on finding niche-dominant, attractively-valued companies with financial flexibility. The distorted values environment coupled with negative real interest rates creates interesting and diverse opportunities for value-oriented investing. |
Value Niche-dominant Attractive Valuations | |
AutomationManager has been evaluating innovations in process control, automation, and rapid prototyping business. They explored views on economics and practical applications of new innovations with current portfolio companies regarding in-house implementation versus outsourcing. |
Process Control Automation Innovation |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 20, 2026 | Fund Letters | SouthernSun SMID Cap | EXTR | Extreme Networks, Inc. | Communication Equipment | Communications Equipment | Bull | NASDAQ | Cloud networking, Communications Equipment, Enterprise software, growth, network infrastructure, recurring revenue, SaaS, subscription model, technology, Wi-Fi 7 | Login |
| Jul 20, 2026 | Fund Letters | SouthernSun SMID Cap | GNRC | Generac Holdings Inc | Specialty Industrial Machinery | Electrical Components & Equipment | Bull | New York Stock Exchange | backup power, Commercial Industrial, Cyclical, data center, electrical equipment, growth, hyperscale, Power generation, Residential, vertical integration | Login |
| Jul 20, 2026 | Fund Letters | SouthernSun SMID Cap | DAR | Darling Ingredients Inc | Packaged Foods | Specialty Chemicals | Bull | New York Stock Exchange | Aviation Fuel, Biofuels, By-Products, Cyclical, EPA Mandates, renewable energy, Renewable Volume Obligation, specialty chemicals, sustainable products, Value | Login |
| Jul 20, 2026 | Fund Letters | SouthernSun SMID Cap | BR | Broadridge Financial Solutions, Inc. | Information Technology Services | Data Processing & Outsourced Services | Bull | New York Stock Exchange | Broker-Dealer Services, Data Processing, defensive, financial technology, Governance, Outsourced Services, Proxy Voting, recurring revenue, Tokenization, Value | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | DAR | Darling Ingredients Inc. | Industrials | Agricultural Products & Services | Bull | New York Stock Exchange | cash flow, Cyclical Recovery, Margin Inflection, regulatory support, Renewable diesel, vertical integration | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | APG | APi Group Corporation | Industrials | Building Products | Bull | New York Stock Exchange | backlog, Bolt-on Acquisitions, Inspection Growth, leverage, margin expansion, recurring revenue | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | CXT | Crane NXT Co. | Industrials | Electronic Equipment & Instruments | Bull | New York Stock Exchange | acquisition, Authentication, Free Cash Flow, Margin Resilience, Payment Innovation, Traceability | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | GNRC | Generac Holdings Inc. | Industrials | Electrical Components & Equipment | Bull | New York Stock Exchange | Automation, backup power, cyclical demand, data centers, Margins, market leadership | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | OSK | Oshkosh Corporation | Industrials | Construction Machinery & Heavy Transportation Equipment | Bull | New York Stock Exchange | backlog, defense contracts, Fleet Replacement, Mission-Critical, Rental Recovery, valuation discount | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | LOB | Live Oak Bancshares Inc. | Financials | Regional Banks | Bull | NASDAQ | AI automation, Credit cycle, deposit growth, Fintech Integration, SBA lending, underwriting discipline | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | EXTR | Extreme Networks Inc. | Information Technology | Communications Equipment | Bull | NASDAQ | Enterprise Networking, IT Spending, market share, Product Differentiation, recurring revenue, valuation | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | DY | Dycom Industries, Inc. | Industrials | Construction & Engineering | Bear | New York Stock Exchange | Acquisition Risk, AI Exuberance, capital allocation, data centers, Fiber Deployment, valuation expansion | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | TKR | Timken Company | Industrials | Industrial Machinery | Bear | New York Stock Exchange | Capital Redeployment, CEO transition, execution risk, Industrial Bearings, M&A Skepticism, strategy | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | TREX | Trex Company, Inc. | Industrials | Building Products | Bear | New York Stock Exchange | Brand moat, competitive dynamics, Distribution, Outdoor Living, Pricing pressure, risk/reward | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | MOD | Modine Manufacturing Company | Consumer Discretionary | Electrical Components & Equipment | Bull | NYSE | AI, cash flow, data centers, growth, leadership, Margins, Reinvestment, thermal management | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | BCO | Brink’s Company | Industrials | Security & Protection Services | Bull | NYSE | buybacks, capital allocation, Cash management, growth, Outsourcing, recurring revenue, Security | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | DAR | Darling Ingredients Inc. | Consumer Staples | Renewable Fuels | Bull | NYSE | cash flow, Feedstock, Fuels, Margin recovery, Regulatory, renewables, vertical integration | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | WSO | Watsco Inc. | Industrials | Trading Companies & Distributors | Bull | NYSE | cash flow, construction, Distribution, growth, HVAC, M&A, market share | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | CXT | Crane NXT Co. | Industrials | Electronic Equipment & Instruments | Bull | NYSE | Authentication, Brand protection, cash flow, Ip, M&A, Margins, Payment systems, Security | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | MOD | Modine Manufacturing Company | Consumer Discretionary | Electrical Components & Equipment | Bull | NYSE | AI, cash flow, data centers, growth, leadership, Margins, Reinvestment, thermal management | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | BCO | Brink’s Company | Industrials | Security & Protection Services | Bull | NYSE | buybacks, capital allocation, Cash management, growth, Outsourcing, recurring revenue, Security | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | DAR | Darling Ingredients Inc. | Consumer Staples | Renewable Fuels | Bull | NYSE | cash flow, Feedstock, Fuels, Margin recovery, Regulatory, renewables, vertical integration | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | WSO | Watsco Inc. | Industrials | Trading Companies & Distributors | Bull | NYSE | cash flow, construction, Distribution, growth, HVAC, M&A, market share | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | CXT | Crane NXT Co. | Industrials | Electronic Equipment & Instruments | Bull | NYSE | Authentication, Brand protection, cash flow, Ip, M&A, Margins, Payment systems, Security | Login |
| Jul 17, 2025 | Fund Letters | Michael Cook | APG | APi Group Corporation | Industrials | Specialty Services | Bull | New York Stock Exchange | Acquisitions, Inspections, Margins, Safety, services | Login |
| Jul 17, 2025 | Fund Letters | Michael Cook | BOOT | Boot Barn Holdings, Inc. | Consumer Discretionary | Apparel Retail | Bull | New York Stock Exchange | Apparel, Balance_Sheet, Margins, retail, Storegrowth | Login |
| Jul 17, 2025 | Fund Letters | Michael Cook | WSO | Watsco, Inc. | Industrials | Industrial Distribution | Bull | New York Stock Exchange | Acquisitions, Distribution, HVAC, Margins, scale | Login |
| Jul 17, 2025 | Fund Letters | Michael Cook | SAM | The Boston Beer Company, Inc. | Consumer Staples | Beverages | Bull | New York Stock Exchange | Beverages, brands, cashflow, innovation, Margins | Login |
| Jul 17, 2025 | Fund Letters | Michael Cook | MSA | MSA Safety, Inc. | Industrials | Safety Equipment | Bull | New York Stock Exchange | Connectedtech, Industrials, Recurringrevenue, Safety, valuation | Login |
| Jun 30, 2025 | Fund Letters | SouthernSun SMID Cap | APG | APi Group Corporation | Industrials | Commercial Services & Supplies | Bull | NYSE | Commercial Services, Elevator Services, Fire Safety, inspection services, Life Safety, recurring revenue, Safety Equipment, security services | Login |
| Jun 30, 2025 | Fund Letters | SouthernSun SMID Cap | BOOT | Boot Barn Holdings, Inc. | Consumer Discretionary | Specialty Retail | Bull | NYSE | Consumer Discretionary, Proprietary Brands, Retail Growth, same-store sales, Specialty retail, store expansion, supply chain, Western Wear | Login |
| Jun 30, 2025 | Fund Letters | SouthernSun SMID Cap | WSO | Watsco, Inc. | Industrials | Trading Companies & Distributors | Bull | NYSE | A2L refrigerants, Acquisitions, Air Conditioning, Distribution, HVAC Distribution, market consolidation, Refrigeration, Residential Replacement | Login |
| Jun 30, 2025 | Fund Letters | SouthernSun SMID Cap | SAM | The Boston Beer Company, Inc. | Consumer Staples | Beverages | Bull | NASDAQ | Alcohol Beverages, Beyond Beer, brand portfolio, craft beer, Hard Seltzer, Innovation Pipeline, margin expansion, Twisted Tea | Login |
| Jun 30, 2025 | Fund Letters | SouthernSun SMID Cap | MSA | MSA Safety, Inc. | Industrials | Machinery | Bull | NYSE | Connected Technology, Fall Protection, Firefighter Equipment, Gas Detection, Industrial Safety, M&A Opportunities, recurring revenue, Safety Equipment, SCBA | Login |
| Apr 30, 2025 | Fund Letters | SouthernSun SMID Cap | BR | Broadridge Financial Solutions, Inc. | Information Technology | Data Processing & Outsourced Services | Bull | NYSE | asset-light, financial services, M&A, Proxy Processing, recurring revenue, SaaS, technology | Login |
| Apr 30, 2025 | Fund Letters | SouthernSun SMID Cap | WSO | Watsco, Inc. | Industrials | Trading Companies & Distributors | Bull | NYSE | A2L Refrigerant, cash-rich, Digital transformation, Distribution, Fragmented Market, HVAC, Scale Advantages | Login |
| Apr 30, 2025 | Fund Letters | SouthernSun SMID Cap | BOOT | Boot Barn Holdings, Inc. | Consumer Discretionary | Specialty Retail | Bull | NYSE | clean balance sheet, margin expansion, Pricing power, Specialty retail, store expansion, tariff impact, Western Lifestyle | Login |
| Apr 30, 2025 | Fund Letters | SouthernSun SMID Cap | USPH | U.S. Physical Therapy, Inc. | Health Care | Health Care Services | Bull | NYSE | competitive moat, Healthcare services, Industrial Injury Prevention, market consolidation, Medicare Reimbursement, Physical Therapy, wage inflation | Login |
| Apr 30, 2025 | Fund Letters | SouthernSun SMID Cap | PII | Polaris Industries, Inc. | Consumer Discretionary | Leisure Products | Bear | NYSE | Balance Sheet Constraints, Channel Inventory, Consumer Discretionary, Exit Position, Mexican Manufacturing, Powersports, Tariff risk | Login |
| Apr 30, 2025 | Fund Letters | SouthernSun SMID Cap | MOD | Modine Manufacturing Company | Industrials | Industrial Machinery | Bull | NYSE | 80/20 Implementation, CEO change, data center, Electric Vehicles, Heat Exchangers, HVAC, thermal management, turnaround | Login |
| Dec 31, 2024 | Fund Letters | SouthernSun SMID Cap | SEIC | SEI Investments Company | Financials | Asset Management & Custody Banks | Bull | NASDAQ | asset management, Bull market, financial services, leadership transition, operational efficiency | Login |
| Dec 31, 2024 | Fund Letters | SouthernSun SMID Cap | AWI | Armstrong World Industries, Inc. | Materials | Building Products | Bull | NYSE | Building Products, capital allocation, energy efficiency, market leader, Pricing power, product innovation, strategic acquisitions | Login |
| Dec 31, 2024 | Fund Letters | SouthernSun SMID Cap | MGPI | MGP Ingredients, Inc. | Consumer Staples | Distillers & Vintners | Bear | NASDAQ | Demand Decline, Distillers, Exit Position, Leadership Turnover, market visibility, Whiskey | Login |
| Dec 31, 2024 | Fund Letters | SouthernSun SMID Cap | BCO | Brink's Company | Industrials | Security & Alarm Services | Bull | NYSE | Cash management, Digital Solutions, margin expansion, operational excellence, organic growth, recurring revenue, security services | Login |
| Jun 30, 2024 | Fund Letters | SouthernSun SMID Cap | BOOT | Boot Barn Holdings, Inc | Consumer Discretionary | Specialty Retail | Bull | NYSE | conservative leverage, Footwear, organic growth, same-store sales, Specialty retail, store expansion, Western Wear | Login |
| Jun 30, 2024 | Fund Letters | SouthernSun SMID Cap | DY | Dycom Industries, Inc | Industrials | Construction & Engineering | Bull | NYSE | BEAD Program, CEO Succession, Federal Broadband Programs, Fiber Construction, M&A Opportunities, margin expansion, telecommunications infrastructure | Login |
| Jun 30, 2024 | Fund Letters | SouthernSun SMID Cap | DAR | Darling Ingredients Inc | Consumer Staples | Food Products | Bull | NYSE | Brazil Operations, Food waste, industry consolidation, renewable energy, Sustainable aviation fuel, sustainable products, vertical integration | Login |
| Jun 30, 2024 | Fund Letters | SouthernSun SMID Cap | USPH | U.S. Physical Therapy, Inc | Health Care | Health Care Services | Bull | NYSE | Bolt-on Acquisitions, Commercial Insurance, Healthcare services, Industrial Injury Prevention, Medicare Reimbursement, Outpatient Clinics, Physical Therapy | Login |
| Mar 31, 2024 | Fund Letters | SouthernSun SMID Cap | DY | Dycom Industries, Inc. | Industrials | Construction & Engineering | Bull | NYSE | construction, Engineering services, Fiber Construction, government contracts, infrastructure, private equity, telecommunications infrastructure, utilities | Login |
| Mar 31, 2024 | Fund Letters | SouthernSun SMID Cap | BOOT | Boot Barn Holdings, Inc. | Consumer Discretionary | Specialty Retail | Bull | NYSE | e-commerce, margin expansion, niche market, Omnichannel, Proprietary Brands, Specialty retail, store expansion, Western Apparel | Login |
| Mar 31, 2024 | Fund Letters | SouthernSun SMID Cap | MGPI | MGP Ingredients Inc. | Consumer Staples | Food Products | Bull | NASDAQ | Branded Spirits, capacity expansion, Cash Flow Visibility, contract manufacturing, Distilled Spirits, Food Ingredients, premium spirits, Specialty Proteins | Login |
| Mar 31, 2024 | Fund Letters | SouthernSun SMID Cap | SAM | The Boston Beer Company, Inc. | Consumer Staples | Beverages | Bull | NYSE | alcoholic beverages, brand portfolio, Hard Seltzer, leadership transition, margin expansion, operational efficiency, Truly, Twisted Tea | Login |
| Dec 31, 2023 | Fund Letters | SouthernSun SMID Cap | ABDY.L | Dycom Industries, Inc. | Industrials | Construction & Engineering | Bull | NYSE | BEAD Program, Construction services, engineering, Equity, Fiber networks, government funding, telecommunications infrastructure, Utility Services | Login |
| Dec 31, 2023 | Fund Letters | SouthernSun SMID Cap | AER|AWI|MUSA|NEU|SAIA|WTM | Armstrong World Industries, Inc. | Materials | Building Products | Bull | NYSE | Building Products, Ceiling Systems, Commercial Construction, defensive, Diversified End Markets, Equity, market leader, Pricing power | Login |
| Dec 31, 2023 | Fund Letters | SouthernSun SMID Cap | BBDC4.SA | Belden Inc. | Information Technology | Electronic Equipment, Instruments & Components | Bull | NYSE | 5G Deployment, Customer Innovation, Destocking Cycle, Equity, Global Supplier, Industrial automation, Reliable Networks, Specialty Networking | Login |
| Dec 31, 2023 | Fund Letters | SouthernSun SMID Cap | SAM | Boston Beer Company, Inc. | Consumer Staples | Beverages | Bull | NASDAQ | alcoholic beverages, brand portfolio, Equity, margin expansion, operational efficiency, share repurchases, Truly Hard Seltzer, Twisted Tea | Login |
| Dec 31, 2023 | Fund Letters | SouthernSun SMID Cap | ADI|BDX|FI|FND|HAS|META|MSFT|MSI|ORCL|TMO | Floor & Décor Holdings | Consumer Discretionary | Specialty Retail | Bull | NYSE | Direct Sourcing, Equity, hard-surface flooring, market share gains, Specialty retail, store expansion, Unit economics, Warehouse Format | Login |
| Sep 30, 2023 | Fund Letters | SouthernSun SMID Cap | SAM | Boston Beer Company, Inc. | Consumer Staples | Brewers | Bull | NASDAQ | alcoholic beverages, brand portfolio, Brewers, debt-free, Hard Seltzer, Manufacturing efficiency, share repurchases | Login |
| Sep 30, 2023 | Fund Letters | SouthernSun SMID Cap | AER|AWI|MUSA|NEU|SAIA|WTM | Murphy USA, Inc. | Consumer Discretionary | Specialty Retail | Bull | NYSE | convenience stores, Fuel Retail, industry consolidation, Low-Cost Model, Same-Store Growth, share repurchases, Walmart Outparcels | Login |
| Sep 30, 2023 | Fund Letters | SouthernSun SMID Cap | ABDY.L | Dycom Industries, Inc. | Industrials | Construction & Engineering | Bull | NYSE | BEAD Program, Construction services, Fiber networks, Fiber Penetration, government funding, margin expansion, telecommunications infrastructure | Login |
| Sep 30, 2023 | Fund Letters | SouthernSun SMID Cap | ALDAR.AD | Darling Ingredients Inc. | Materials | Chemicals | Bull | NYSE | industry consolidation, low valuation, renewable energy, Sustainable aviation fuel, sustainable products, vertical integration, Waste-to-Energy | Login |
| Mar 31, 2023 | Fund Letters | SouthernSun SMID Cap | WSO | Watsco Inc. | Capital Goods | Trading Companies & Distributors | Bull | NYSE | Acquisitions, defensive, Distribution, HVAC, North America, Repair, Replace, technology | Login |
| Mar 31, 2023 | Fund Letters | SouthernSun SMID Cap | BCO | The Brink's Company | Commercial & Professional Services | Commercial Services & Supplies | Bull | NYSE | ATM Services, Cash management, Digital Solutions, Global, margin expansion, organic growth, transformation | Login |
| Mar 31, 2023 | Fund Letters | SouthernSun SMID Cap | ALDAR.AD | Darling Ingredients | Food, Beverage & Tobacco | Food Products | Bull | NYSE | Acquisitions, Decarbonization, EBITDA, Rendering, renewable energy, Sustainable aviation fuel, vertical integration | Login |
| Mar 31, 2023 | Fund Letters | SouthernSun SMID Cap | WRK | WestRock Company | Materials | Paper & Forest Products | Bull | NYSE | Consumer Packaging, Corrugated, Cyclical, Free Cash Flow, Latin America, Mill Optimization, Packaging | Login |
| Mar 31, 2023 | Fund Letters | SouthernSun SMID Cap | LPX | Louisiana-Pacific Corporation | Materials | Paper & Forest Products | Bull | NYSE | Building Products, Engineered Wood, Housing, market share, OSB, Siding, transformation, Value Added | Login |
| Apr 30, 2022 | Fund Letters | SouthernSun SMID Cap | AGCO | AGCO Corp. | Farm & Heavy Construction Machinery | Agricultural & Farm Machinery | Bull | New York Stock Exchange | Agricultural Equipment, Equipment Solutions, Farm Machinery, Global Manufacturer, Precision Agriculture, South America, Sustainable AgTech | Login |
| Apr 30, 2022 | Fund Letters | SouthernSun SMID Cap | DAR | Darling Ingredients, Inc. | Packaged Foods | Packaged Foods & Meats | Bull | New York Stock Exchange | EBITDA growth, Feed Ingredients, Food Ingredients, Joint venture, Low Carbon Feedstock, Renewable diesel, renewable energy, Sustainable Ingredients | Login |
| Apr 30, 2022 | Fund Letters | SouthernSun SMID Cap | THO | Thor Industries, Inc. | Recreational Vehicles | Leisure Products | Bull | New York Stock Exchange | Airstream, conservative balance sheet, economic downturn, market leader, Recreational Vehicles, RV Lifestyle, RV Manufacturer, share repurchase | Login |
| Apr 30, 2022 | Fund Letters | SouthernSun SMID Cap | SCL | Stepan Co. | Specialty Chemicals | Specialty Chemicals | Bull | New York Stock Exchange | Alkoxylation, capital allocation, INVISTA Acquisition, Polymers, Pricing power, Raw Material Inflation, specialty chemicals, Surfactants | Login |
| Apr 30, 2022 | Fund Letters | SouthernSun SMID Cap | TMX | Terminix Global Holdings, Inc. | Other | Environmental & Facilities Services | Neutral | New York Stock Exchange | exit strategy, Operational Improvement, Pest Management, Portfolio Constraints, Pure-Play, Rentokil, UK Acquisition, valuation gap | Login |
| Apr 30, 2022 | Fund Letters | SouthernSun SMID Cap | COOK | Traeger, Inc. | Furnishings, Fixtures & Appliances | Leisure Products | Bull | New York Stock Exchange | Accessories, Brand Leadership, Category Leader, Consumables, innovation, IoT Devices, management incentives, market share growth, Mobile App, Wood Pellet Grills | Login |
| - | Fund Letters | SouthernSun SMID Cap | THO | Thor Industries, Inc. | Recreational Vehicles | Recreational Vehicles | Bull | New York Stock Exchange | Acquisitions, Consumer Discretionary, Inventory Replenishment, manufacturing, margin expansion, market leader, Recreational Vehicles, RVs | Login |
| - | Fund Letters | SouthernSun SMID Cap | PII | Polaris Inc. | Recreational Vehicles | Recreational Vehicles | Bull | New York Stock Exchange | CEO transition, Consumer Discretionary, manufacturing, market share, Off-Road Vehicles, Powersports, product development, supply chain | Login |
| - | Fund Letters | SouthernSun SMID Cap | TMX | Terminix Global Holdings Inc. | Other | Environmental & Facilities Services | Bull | New York Stock Exchange | brand recognition, Commercial Services, customer experience, Employee Retention, operational improvements, pest control, Residential Services | Login |
| - | Fund Letters | SouthernSun SMID Cap | CASS | Cass Information Systems, Inc. | Specialty Business Services | Data Processing & Outsourced Services | Bull | NASDAQ | balance sheet strength, Commercial Banking, information services, interest rate sensitivity, Manufacturing Sector, payment processing, Technology Solutions | Login |
| TICKER | COMMENTARY |
|---|---|
| EXTR | Extreme Networks, Inc. (EXTR) was a top contributor in the second quarter, delivering its fifth consecutive quarter of double-digit revenue growth. For the fiscal third quarter ended March 31, 2026, the company reported net revenues of $316.9 million, up 11.4% year-over-year, and non-GAAP diluted EPS of $0.26, both ahead of consensus expectations. SaaS Annual Recurring Revenue grew 28.6% year-over-year to $236.4 million, reflecting deepening adoption of the company's AI-driven cloud networking platform, and recurring revenue reached 36% of total revenue. Non-GAAP operating margin expanded to 15.2% from 14.1% in the prior-year period, and management raised fourth quarter revenue guidance to $330–$335 million. In our opinion, investor enthusiasm during the quarter was driven by tangible evidence that the company's transition to a subscription-based model is gaining durable momentum, as Platform ONE adoption accelerated across enterprise customers and EMEA delivered particularly strong growth. We believe the ongoing Wi-Fi 7 hardware refresh cycle, continued SaaS ARR compounding, and management's proactive resolution of supply chain constraints position Extreme well for continued share gains. |
| GNRC | Generac Holdings Inc (GNRC) was a top contributor in the SMID Cap strategy during the second quarter, reporting first quarter 2026 results that significantly exceeded expectations. Net sales increased 12% year-over-year to $1.06 billion, and adjusted diluted EPS of $1.80 surpassed the consensus estimate of $1.35 by more than 30%, representing a 43% increase over the prior-year period. The primary driver of upside was the Commercial & Industrial segment, where net sales grew 28% to $510.1 million, driven by shipments to the company's domestic industrial distributor and rental channels, and increased controls solutions sales to the global power generation market. Separately, management noted it is in the final stages of vendor qualification with several hyperscale customers and is seeing backlog expansion for these products, pointing to further data center-driven upside in future quarters. Residential segment net sales were roughly stable at $552.2 million, consistent with management's expectation of a modest recovery in the home standby market following an extended period of channel inventory normalization. Adjusted EBITDA margin expanded to 18.3%, and management raised its full-year 2026 net sales growth outlook to the mid-to-high teens percent range — above the prior guidance of mid-teens — and increased its adjusted EBITDA margin guidance to 18.5%–19.5%. The company also completed its acquisition of Enercon Services during the quarter, deepening vertical integration in large megawatt backup power solutions for the data center market. In our opinion, the share price appreciation during the quarter reflected growing investor conviction that the data center opportunity represents a durable, multi-year growth driver for Generac, complementing the anticipated recovery in the residential market as outage activity normalizes. We believe the combination of C&I momentum, improving residential fundamentals, and expanding margin profile positions the company for a meaningful earnings inflection over the next several years. |
| DAR | Darling Ingredients Inc (DAR) was a bottom contributor in the Small Cap strategy during the second quarter after being a top contributor during the first, up nearly 65% through March 31. DAR is the largest publicly traded company turning edible by-products into sustainable products and a leading producer of renewable energy. DAR's fundamentally improved earnings trajectory following the robust EPA mandates on renewable fuel volumes remains intact, and the business is performing well. The modest decline in the share price in Q2 largely reflected the pending resolution(s) of the Iran military conflict, which brought nonrenewable fuel prices down meaningfully. For reference, Crude Oil Futures were down nearly 40% in the second quarter, and DAR declined partly due to the substitution value of renewables being incrementally less for aviation fuel, in particular. That said, the DAR volume picture for the year is not impacted meaningfully by exogenous factors like the price of oil and is rather determined by the minimum volume requirements from the RVO and the growth of DAR's other business lines. We remain optimistic on DAR's business prospects and believe shares remain underpriced relative to both the near-term and long-term earnings power of the company. |
| BR | Broadridge Financial Solutions, Inc. (BR), the leading processor of proxy voting and fixed-income trading in the U.S., was a bottom contributor in the SMID Cap strategy during the second quarter despite 7% recurring revenue growth, 11% Adjusted EPS growth, and increases to full-year guidance for both recurring revenue and Adjusted EPS. Shares appear to have fallen on two longer-dated fears: that AI will erode BR's technology franchises and that tokenized equities will disintermediate its governance business. These pressures were amplified by a cut to closed-sales guidance, which we attribute to sales-cycle timing rather than demand destruction. In our view, both fears are overstated. Regarding AI, we believe it is highly unlikely that BR clients will in-source proxy processing. First, the risk/reward is sharply asymmetric: we believe the compliance and liability consequences of a failed proxy distribution far outweigh any marginal cost savings. Second, any broker-dealer attempting to turn proxy distribution into a profit center would likely invite a review of the very fee schedule that creates the opportunity. Finally, even a client determined to migrate would have to do so over years, not quarters (BR's multi-year contracts make any transition gradual). On tokenization, the SEC has affirmed that tokenized securities carry the same governance and compliance obligations as traditional equities, and the vast majority of tokenized equities will, in our view, continue to flow through broker-dealers and digital platforms that are already BR's core clients. With a conservatively leveraged balance sheet (~1.7x Net Debt/EBITDA), double-digit EPS growth guidance, and a proven management team, BR trades at just 15x fiscal 2026 Adjusted EPS, a combination we find compelling. |
| VMI | Valmont Industries, Inc. (VMI) was listed as a top contributor with 3.9% average weighting and 148 bps contribution to return. |
| CXT | Crane NXT, Co. (CXT) was listed as a top contributor with 4.2% average weighting and 115 bps contribution to return. |
| LOB | Live Oak Bancshares, Inc. (LOB) was listed as a top contributor with 4.3% average weighting and 99 bps contribution to return. |
| SAM | Boston Beer Company, Inc. (SAM) was listed as a top detractor with 2.2% average weighting and -57 bps contribution to return. |
| USPH | U.S. Physical Therapy, Inc. (USPH) was listed as a top detractor with 4.3% average weighting and -33 bps contribution to return. |
| BCO | Brink's Company (BCO) was listed as a top detractor with 3.5% average weighting and -28 bps contribution to return. |
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