| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | -0.5% | 7.7% |
| 2025 |
|---|
| 7.7% |
Sawgrass Asset Management's Small Cap Quality Growth strategy underperformed in Q4 2025, returning -0.5% versus the Russell 2000 Growth's 1.3%, and delivered 7.7% for the full year versus the benchmark's 13.0%. The quarter reflected broader small-cap headwinds as growth stocks faced pressure from large-cap and value outperformance. Healthcare stocks dominated top contributors with Iradimed leading at over 100 basis points, while Commvault was the largest detractor. The manager maintains conviction in the emerging small-cap decade thesis, citing three critical factors: small-cap valuations at 20-year relative lows, mega-cap concentration at historically extreme levels, and large-cap leadership duration representing the second-longest cycle in U.S. history. The risk-on market environment favored low-quality factors throughout 2025, with loss-makers significantly outperforming profitable companies and microcaps leading performance. The manager believes these stretched conditions create a coiled spring effect that will drive historical small-cap appreciation when the leadership rotation occurs.
Small-cap stocks are positioned for a significant leadership rotation after an extended period of large-cap dominance, supported by extreme relative valuation discounts, mega-cap concentration risks, and the second-longest large-cap leadership cycle in U.S. history.
The argument for the advent of the small-cap decade continues to grow based on three key linchpins. The rubber band of these factors is stretched tight and when it snaps, small caps are likely to generate historical appreciation. The risk-conscious Small Cap Quality Growth strategy is built for this market environment.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 20 2026 | 2025 Q4 | AORT, BTSG, CRVL, CVLT, IRMD, PRGS, SANM, SNEX, WLDN | growth, healthcare, industrials, Quality, small caps, technology, value | - | The manager argues for the advent of the small-cap decade based on three key factors: relative valuation discount of small cap to large cap at… |
| Jul 21 2025 | 2025 Q2 | SNEX | Cycles, Mean reversion, Quality, small caps, valuation | SNEX | The letter highlights extreme valuation and performance dispersion between large and small caps. Management argues that quality small caps are positioned for outsized returns when… |
| May 13 2025 | 2025 Q1 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
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 |
Risk AppetiteManager emphasizes disciplined risk management through cycle awareness rather than market timing. Fund maintains cash cushion during high-risk periods and deploys capital countercyclically. Approach focuses on behavioral edge by having cash available when fear creates best entry points and avoiding leverage that leads to forced selling. |
Leverage Cash Volatility Positioning Discipline | |
Small CapsSmall caps getting strong start in 2026 supported by easing monetary conditions and constructive fiscal backdrop. Small caps more sensitive to economic cyclicality which is overdue for expansion. Expected to grow at better pace than large caps in 2026 after long period of underperformance. |
Value Growth Cyclical Monetary Policy Fiscal Policy | |
| 2025 Q2 |
MeanReversion |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 21, 2025 | Fund Letters | Dean McQuiddy | SNEX | StoneX Group Inc. | Financials | Capital Markets | Bull | NASDAQ | acquisition, Capital markets, competitive position, earnings growth, Record Revenues | Login |
| TICKER | COMMENTARY |
|---|---|
| AORT | For the year, Iradimed (IRMD), Artivion (AORT), Willdan (WLDN), StoneX (SNEX) and Sanmina (SANM) all contributed greater than 100bp of return for the year. |
| BTSG | Iradimed (IRMD) contributed over 100bp of return while Bright Spring (BTSG) and Sanmina (SANM) contributed better than 50bp each. |
| CRVL | Progress Software (PRGS) and Corvel (CRVL) were laggards. |
| CVLT | Commvault provides cyber resilience solutions. During the quarter, management reported softer-than-expected bookings and lost its chief financial officer to another company. |
| IRMD | IRMD develops, manufactures, and markets MRI-compatible medical devices, including infusion pump systems and patient monitors. The company delivered record third-quarter revenue and earnings, prompting management to raise full-year guidance. This strong operational performance, combined with the announcement of a special cash dividend, underscored the company's financial health and commitment to shareholder returns. |
| PRGS | Progress Software (PRGS) and Corvel (CRVL) were laggards. |
| SANM | Iradimed (IRMD) contributed over 100bp of return while Bright Spring (BTSG) and Sanmina (SANM) contributed better than 50bp each. For the year, Iradimed (IRMD), Artivion (AORT), Willdan (WLDN), StoneX (SNEX) and Sanmina (SANM) all contributed greater than 100bp of return for the year. |
| SNEX | For the year, Iradimed (IRMD), Artivion (AORT), Willdan (WLDN), StoneX (SNEX) and Sanmina (SANM) all contributed greater than 100bp of return for the year. |
| WLDN | Willdan Group, Inc. (WLDN) posted a full year total return of 172%, successfully capitalizing on surging demand for energy efficiency and grid modernization services, particularly from the AI-driven data center market and large government contracts. |
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