| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 0.104 | -0.012 | 0.049 |
| 2025 | 2024 |
|---|---|
| 4.9% | 15.6% |
The FAM Value Fund returned -1.17% in Q4 2025, trailing the Russell Midcap Index which gained 0.16%. Underperformance was driven by the market's continued preference for speculative AI-related investments over quality companies with strong fundamentals. Top contributors included Ross Stores, which captured market share as consumers became value-conscious, Markel Group with excellent insurance results and disciplined capital allocation, and Amphenol benefiting from AI data center buildouts. Key detractors were Brown & Brown facing margin pressure from merger integration costs, AutoZone with higher operating expenses from expansion investments, and Fastenal hurt by industrial manufacturing weakness. The firm trimmed positions in APH, ROST, and Berkshire Hathaway, raising cash from 2.4% to 3.2%. Looking ahead, Fenimore expects continued market volatility as investors balance solid earnings growth and Fed rate cuts against AI sustainability concerns and political uncertainties. The firm remains disciplined around quality investing, believing fundamentals will eventually reassert themselves as primary return drivers.
Fenimore maintains disciplined focus on high-quality companies with strong fundamentals, believing that solid business characteristics should reassert themselves as primary stock price drivers despite current market preference for speculative AI-related investments.
Market conditions entering 2026 remain mixed with extended valuations for AI-related stocks while opportunities emerge in quality franchises at multi-year lows. The research team expects continued volatility as investors balance solid earnings growth and Fed rate cuts against AI sustainability questions and mid-term elections.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 13 2026 | 2025 Q4 | ADI, AJG, APH, AZO, BAM, BR, BRK-B, BRO, FAST, HEI, IEX, KEYS, MKL, MLM, PGR, ROST, SYK, TT, VMC, ZBRA | AI, fundamentals, mid cap, Quality, Speculation, value |
MKL APH BRO AZO FAST |
Fenimore maintains focus on high-quality companies with strong balance sheets, consistent profitability, and prudent capital allocation despite continued underperformance versus speculative names. The firm believes… |
| Oct 9 2025 | 2025 Q3 | A, APH, BRO, CDW, LSTR, ROST, WAT | AI, industrials, Logistics, retail, value |
APH US ROST US A US LSTR US |
The fund highlights positions in Ross Stores and Amphenol, benefiting from AI data center buildouts and improving retail margins. New buys like Agilent and Landstar… |
| Jun 30 2025 | 2025 Q2 | APH, BN, BRO, MKC | fundamentals, long-term, Quality, Valuation discipline, value | - | The commentary emphasizes valuation discipline combined with business quality as markets reward low-quality speculation. Management argues that durable franchises with strong management teams remain best… |
| Mar 31 2025 | 2025 Q1 | BRK/B, BRO, KEYS | - | - | - |
| Dec 31 2024 | 2024 Q4 | BKNG, CDW, KMX, MCHP, SSB | - | - | - |
| Sep 30 2024 | 2024 Q3 | AME, APH, BN, BRO, MCHP | - | - | - |
| Jun 30 2024 | 2024 Q2 | ADI, APH, CDW, FBIN, IEX, KEYS | - | - | - |
| Mar 31 2024 | 2024 Q1 | BRO, DG, KEYS, MCHP, PGR, PNFP, TROW | - | - | - |
| Dec 31 2023 | 2023 Q4 | APD, CDW, MKL, ROST, WAT | - | - | - |
| Sep 30 2023 | 2023 Q3 | CDW, ZBRA | - | - | - |
| Jun 30 2023 | 2023 Q2 | APH, BRO, CDW | - | - | - |
| Mar 31 2023 | 2023 Q1 | ADI, FIS, ICE, MTB, ROST, ZBRA | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
QualityThe company emphasizes investing in businesses with excellent economics, durable competitive advantages, and high-integrity management. This quality focus is evident in concentrated equity holdings and operating business acquisitions. |
Durable Advantages Management Quality Economic Moats Competitive Position | |
| 2025 Q3 |
IndustrialsThe fund increased exposure to high-quality industrial businesses with potential for cyclical upturn. Added Quanta Services for AI data center build-out, Hubbell for electrical grid upgrades, Old Dominion for freight cycle recovery, and Waste Connections for secondary market focus. |
Infrastructure Automation Transportation Electrical Equipment Waste Management |
Retail |
||
ValueThe manager continues to find attractive value opportunities despite expensive markets, purchasing undervalued companies like Centene, GlaxoSmithKline, Carrefour and PayPal trading at low multiples with strong fundamentals. |
Undervalued Low Multiples Contrarian Opportunistic | |
| 2025 Q2 |
QualityThe company emphasizes investing in businesses with excellent economics, durable competitive advantages, and high-integrity management. This quality focus is evident in concentrated equity holdings and operating business acquisitions. |
Durable Advantages Management Quality Economic Moats Competitive Position |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 9, 2025 | Fund Letters | John Fox | APH US | Amphenol Corp. | Information Technology | Electronic Components | Bull | NYSE | AI, Automation, electronics, growth, infrastructure, Margins, valuation | Login |
| Oct 9, 2025 | Fund Letters | John Fox | ROST US | Ross Stores, Inc. | Consumer Discretionary | Apparel Retail | Bull | NASDAQ | Consumers, growth, Margins, Off-price, retail, Sourcing, Value | Login |
| Oct 9, 2025 | Fund Letters | John Fox | A US | Agilent Technologies, Inc. | Health Care | Life Sciences Tools & Services | Bull | NYSE | Consumables, growth, instruments, life sciences, Margins, R&D, recovery | Login |
| Oct 9, 2025 | Fund Letters | John Fox | LSTR US | Landstar System, Inc. | Industrials | Trucking | Bull | NASDAQ | asset-light, growth, Logistics, Margins, recovery, ROIC, Trucking | Login |
| Jan 13, 2026 | Fund Letters | John Fox | MKL | Markel Group Inc. | Financials | Property & Casualty Insurance | Bull | New York Stock Exchange | Capitalallocation, compounding, Insurance, investments, underwriting | Login |
| Jan 13, 2026 | Fund Letters | John Fox | APH | Amphenol Corporation | Information Technology | Electronic Components | Bull | New York Stock Exchange | Acquisitions, AI, cashflow, Connectors, datacenters | Login |
| Jan 13, 2026 | Fund Letters | John Fox | BRO | Brown & Brown, Inc. | Financials | Insurance Brokers | Bull | New York Stock Exchange | Acquisitions, cashflow, compounding, Insurancebrokerage, Pricing | Login |
| Jan 13, 2026 | Fund Letters | John Fox | AZO | AutoZone, Inc. | Consumer Discretionary | Automotive Retail | Bull | New York Stock Exchange | Autoparts, buybacks, cashflow, Defensiveness, Margins | Login |
| Jan 13, 2026 | Fund Letters | John Fox | FAST | Fastenal Company | Industrials | Industrial Distribution | Bull | NASDAQ | Industrialdistribution, Logistics, Margins, scale, Vending | Login |
| TICKER | COMMENTARY |
|---|---|
| ADI | Best economics in analog: 70%+ gross margins, 45–50% EBIT target, rising ROIC. Premium positioning: 4X average selling prices, mission-critical sockets, extreme switching costs. Hybrid manufacturing edge: ~5% capex vs. peers 15%+ → superior free cash flow + resilience. Maxim synergies: power + systems mix shift, margin accelerator. Secular and cyclical tailwinds: industrial automation, EV electrification (wireless battery management system), AI data center power & test, 100% ADI alpha hit rate~39% annualized returns in past upcycles and we believe 2Q25 marked the restart; pricing + margin inflection underway. |
| AJG | Arthur J Gallagher faced continued negative sentiment around insurance-related companies, with shares underperforming due to a combination of investors moving away from typically more defensive stocks and company-specific factors. The company's earnings were impacted by accounting noise from the AssuredPartners acquisition and a miss on brokerage organic growth, which led to questions about growth deceleration. |
| APH | We trimmed Amphenol Corp. |
| AZO | We initiated two new positions during the year—Greggs and AJ Bell, whilst reducing our exposure to NEXT and Compass Group; and selling out of AutoZone entirely during September. |
| BR | This valuation disparity is what we see as another example of the large cap vs. small cap valuation opportunities in general, as DFIN's market value is only $1.2 billion vs. BR at $26.6 billion. |
| BRK-B | Our annual pilgrimage to Omaha was running according to plan until, as we headed to the airport while listening to the final moments of the annual shareholder's meeting, Buffett dropped the bombshell: he would step down as CEO at year-end. We believe the most important aspect of Berkshire—its culture—is likely to endure. Abel inherits Berkshire's massive $382 billion cash position and will likely allocate more capital than Warren and Charlie did over much of their investing careers. |
| BRO | In 2026, we plan to publish deep dives on Brown & Brown |
| FAST | FAST underperformed during the quarter as elevated expectations reset and industrial demand recovered more slowly than expected. Sales growth from new customer sites remained. Strong cash generation, a healthy balance sheet, and disciplined capital allocation continue to provide downside support. |
| HEI | We've held HEI since early 2021. It's one of those quietly excellent family businesses. The Mendelsons have run it for decades, they own a meaningful stake, and they've built durable niches in aerospace parts and defense electronics. HEI was up 36% in 2025, hitting new highs on strong results across both their Flight Support and Electronic Technologies divisions. They keep doing what they do: disciplined acquisitions, high returns on capital, strong cash generation. |
| IEX | IDEX's stock had a welcome bounce as the company's organic growth and order book inflected higher in line with our thesis. |
| KEYS | Keysight is an electronic design and testing company. It is at the heart of the digital revolution, providing solutions to help accelerate innovation in industries such as communications, networking, electronics, semi-conductor, automotive, aerospace and battery. The company delivered a material acceleration in order growth and guided meaningfully above consensus, with core order growth reaching double digits and broad-based strength across its segments. |
| MKL | MKL produced excellent results in its insurance and investment operations. The insurance segment delivered a 93% combined ratio while the equity portfolio benefited from the year-end market rally. MKL's disciplined capital allocation, including significant stock buybacks, boosted their book value per share growth. |
| PGR | Cadence, Linde, United Rentals, and Progressive rounded out the top-five detractors in the quarter. |
| ROST | ROST posted strong same-store sales in its fiscal third quarter. In our estimation, the new CEO is doing an excellent job of reviving growth. We also believe that this off-price retailer is advantaged over traditional apparel companies because of its everyday discounts. In the current economy, where certain consumers are stressed, ROST fills a critical need. |
| SYK | Stryker (SYK) is a leading global medical technology company with strong franchises across orthopedics, surgical equipment, and neurotechnology. The company has consistently gained market share due to its first-to-market robotic surgery platform and strong execution in ambulatory surgery centers. Furthermore, growth expectations are boosted by secular tailwinds from an aging population and a long runway for international growth. |
| TT | TT continued to be a juggernaut, in our view, as earnings and backlog remained strong. AI data center cooling was a strong contributor while its residential HVAC business is experiencing weakness as the industry changes over to a new refrigerant. |
| VMC | The Vulcan Materials and Philip Morrises of the world are fine examples of modestly profitable businesses that can turn out to be wonderful investments if those profits are protected for decades. |
| ZBRA | back in November, Zebra Technologies (ZBRA) hit our insider radar. On the surface, the valuation of the $12.6B business appeared attractive at less than a 14x P/E, a modest debt burden and decent return on incremental invested capital. It looked like a worthwhile investment candidate – but the wheels came flying off when we did our risk review. What these attractive statistics do not tell you is that management had entered into a transformative acquisition of commercial touch screen provider, Elo Touch for $1.3B. The problem, management almost certainly paid too much for a business generating ~$80M in EBITDA (earnings before interest, taxes and depreciation) (press release). At over 16x EBITDA, the acquisition blew out the capital structure with debt and presented significant execution risk resulting in an expected risk-adjusted return well below our threshold of safety. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
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