| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Fiduciary Management spent Q2 2026 buying businesses the market has written off while global stock markets were carried higher by AI momentum, with the Russell 2000 and S&P 500 posting their best quarterly returns since 2020. The AI complex experienced parabolic gains, with semiconductor stocks posting potentially their best quarter ever and the Philadelphia Stock Exchange Semiconductor Index gaining 88%. FMI views this as a bubble with extraordinarily high valuations and minimal room for error, noting that hyperscalers are projected to spend over $725 billion on capex in 2026 with challenging return math. The manager is positioned to benefit from AI on the cost side through portfolio companies like FTI Consulting, Capital One, and Fluidra that could realize productivity gains rather than owning companies selling into the AI investment cycle. Quality Compounders fell 1% YTD while AI themes skyrocketed, creating a valuation gap rivaling the dot-com bubble. FMI owns businesses with durable competitive advantages trading at meaningful discounts to intrinsic value, believing the long-term setup is the strongest in many years with a 3- to 5-year outlook looking very bright.
FMI is avoiding the AI bubble and instead buying quality businesses at compelling valuations that the market has written off, positioning to benefit from AI productivity gains on the cost side rather than owning companies selling into the speculative AI capex cycle.
The manager believes the long-term setup for their portfolios is the strongest they have seen in many years, with the valuation gap between the AI complex and the rest of the market rivaling levels last seen at the height of the dot-com bubble. On a 3- to 5-year time horizon, they believe the picture for FMI looks very bright, not in spite of the current mania but partly because of it. They remain steadfast in their research process and discipline with a continued focus on capital preservation.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 11 2026 | 2026 Q2 | COF, FCN, FRD.MC | AI Bubble, Banking, Consulting, Quality, semiconductors, small cap, value |
FCN COF FRD.MC |
FMI is avoiding the AI bubble and buying quality businesses at compelling valuations. While semiconductor stocks posted their best quarter ever and AI themes skyrocketed, the manager sees speculative excess with challenging return math for hyperscalers. FMI is positioned to benefit from AI productivity gains on the cost side through holdings like FTI Consulting, Capital One, and Fluidra, with the valuation gap rivaling the dot-com bubble creating strong long-term opportunity. |
| Apr 12 2026 | 2026 Q1 | BKNG, CARR, FBHS, FERG, FLR.PA, HAYW, HURN, HWDN.L, IMCD.AS, LPX, MAS | AI, contrarian, defense, energy, Geopolitical, Housing, Quality, value | - | FMI maintains contrarian value positioning amid Iran war volatility, avoiding energy/defense outperformers due to quality concerns while staying overweight housing-related names benefiting from demographic tailwinds. They view AI fears around Huron and Booking as overblown opportunities. Quality businesses with strong balance sheets at discounted valuations should outperform as geopolitical uncertainty creates market dislocations. |
| Jan 11 2026 | 2025 Q4 | ACN, CAT, HAYW, JPM, MSFT, NVDA, SMIN.L, UNP | AI, Bubble, capital intensity, Quality, small caps, technology, value | - | FMI maintained discipline during 2025's AI-driven junk rally, underperforming indices while generating solid absolute returns. The firm questions sustainability of massive AI capital spending and market concentration, seeing concerning bubble-like conditions. Despite challenging environment favoring low-quality speculation over fundamental analysis, FMI continues finding quality opportunities and expects eventual rotation back to their proven investment approach. |
| Oct 14 2025 | 2025 Q3 | BDX, GRG.L, OMF | AI, Bubble, Defensive, Quality, Speculation, Valuations | - | FMI warns of bubble conditions with record valuations and AI speculation despite weakening global economic fundamentals. The firm maintains defensive positioning in quality businesses with strong balance sheets, contrasting sharply with benchmark concentration in mega cap tech. They prepare for potential volatility while highlighting the disconnect between soaring markets and deteriorating Main Street conditions. |
| Jun 30 2025 | 2025 Q2 | BDX, GRG.L, OMF | AI, Bubble, Quality, small cap, Speculation, technology, Valuations |
NSIT MAS OMF BDX GRG.L |
FMI sees bubble-like market conditions with record valuations and AI speculation reminiscent of past bubbles. Despite Q3 gains, they maintain defensive positioning in quality businesses trading at discounts, including OneMain Holdings, Becton Dickinson, and Greggs. With economic growth slowing and unprecedented market concentration, they proceed cautiously while prepared to capitalize on future volatility. |
| Apr 14 2025 | 2025 Q1 | AHT.L, ALLE, D05.SI, FCFS, LLOY.L, SW.PA | defense, Europe, small cap, tariffs, technology, value, volatility |
FCFS ALLE SW.PA |
FMI sees market excess unwinding as speculative themes collapse and value stocks outperform. Technology's disconnect from economic reality mirrors 2000 bubble conditions. Trump's tariff volatility creates business uncertainty while European defense spending surges. The firm welcomes increased volatility as opportunities emerge for their disciplined value approach focused on durable, cash-generating businesses trading at discounts. |
| Dec 31 2024 | 2024 Q4 | ARMK, ARW, BJ, G, GTES, HAYW, HLI, HSIC, IPG, RHI, SKX, SSD | consumer, industrials, Quality, small caps, technology, value |
HAYW IPG |
FMI Small Cap delivered 10.65% in 2024, outperforming value benchmarks through disciplined stock selection. The fund added pool equipment manufacturer Hayward during cyclical weakness and exited Interpublic Group on merger concerns. With 30 concentrated holdings and 99% active share, the strategy targets durable franchises with recurring revenue trading below intrinsic value. |
| Sep 30 2024 | 2024 Q3 | ARMK, BJ, CSL, FBIN, FN, G, HLI, HSIC, NSIT, NVDA, PLXS, SKX, SSD | consumer, industrials, Quality, small caps, technology, value |
ARMK FN |
FMI Small Cap delivered 6.6% in Q3 with disciplined value investing in quality franchises. Added Aramark for defensive growth and margin expansion potential while selling Fabrinet on AI-driven overvaluation. Portfolio of 30 concentrated holdings trades at 18.1x forward earnings with 99% active share, maintaining focus on recurring revenue businesses at attractive valuations. |
| Jun 30 2024 | 2024 Q2 | BJ, BKNG, BME.L, D05.SI, DGX, DLTR, FBIN, FERG.L, FN, GOOGL, HSIC, KMX, MAS, MU, PHG, RHI, RYAAY, SKX, SSD, UL | AI, healthcare, Japan, Quality, small caps, Speculation, value |
HSIC DGX RYAAY |
FMI maintains disciplined value focus amid record market speculation and concentration. Small Cap strategy outperformed benchmarks despite challenging environment. Manager sees unprecedented AI bubble with limited revenue justification and expects eventual rotation back to value investing. Quality Small Cap companies trade at historically attractive valuations versus Large Cap, creating compelling long-term opportunities for patient investors. |
| Apr 15 2024 | 2024 Q1 | ACGL, BRK.B, CNM, CSL, DLTR, ETN, G, GTES, MU, NOFCY, NVT, PGR, PHG, PLXS, RHI, SAFRY, SMIN, SONY, UNH, YOKOY | Balance Sheet, Construction, international, Quality, small cap, Valuations, value |
GTES SCHW WEIR.L |
FMI delivered solid Q1 returns while maintaining skepticism about market fundamentals. The S&P 500 trades at extreme valuations with elevated profit margins, creating risks. FMI focuses on quality businesses with strong balance sheets at attractive valuations, particularly in Small Cap and International markets where relative valuations appear compelling after years of underperformance. |
| Jan 14 2024 | 2023 Q4 | 005930.KS, BJ, BME.L, CARR, DGE.L, G, HSIC, RHI, ROG.SW, RYAAY, SAP.DE, SKX, SSD, UL | Concentration, Debt, international, Quality, small caps, technology, Valuations, value |
BJ CARR DGE.L |
FMI's Small Cap Strategy outperformed significantly in 2023 despite challenging market conditions dominated by Magnificent Seven concentration and speculative excess. The firm maintains value discipline, highlighting elevated U.S. valuations and record debt levels as key risks. They see attractive opportunities in profitable Small Cap and International stocks trading at historic discounts to Large Cap peers. |
| Oct 21 2023 | 2023 Q3 | 005930.KS, BARN.SW, BJ, BKNG, CCEP, CDW, DG, DLTR, FBIN, HLI, IPG, LGIH, MU, OMC, SLB, SNN.L, SYY, VVV, ZION | China, Concentration, defensives, inflation, rates, small caps, valuation, value |
VVV SYY CCEP |
FMI outperformed in Q3 by avoiding speculative stocks while market concentration reached extreme levels. With U.S. valuations in the 10th decile historically and small caps at record discounts to large caps, the firm added defensive positions and sees compelling value opportunities as markets eventually revert from growth back to value. |
| Jun 30 2023 | 2023 Q2 | 6268.T, AAPL, AMZN, BECN, BJ, BME.L, CDW, DG, FERG.L, G, GOOGL, KMX, MAS, MSFT, NTRS, NVDA, RHI, SSD, SW.PA, TRTN | AI, Concentration, Europe, growth, small caps, technology, Valuations, value |
ARHI CDW ROG.SW |
FMI maintains strong conviction in value investing despite current headwinds, arguing market concentration and growth dominance represent temporary dislocations. With Small Caps at 40-year discounts to Large Caps and European stocks at all-time US discounts, they see compelling opportunities. Normalization of rates and end of QE should restore price discovery, benefiting their disciplined approach to high-quality businesses at attractive valuations. |
| Mar 31 2023 | 2023 Q1 | BJ, BKNG, BME.L, CSL, D05.SI, DG, FBIN, GOOGL, HWDN.L, LLOY.L, NSIT, PLXS, PRI, ROG.SW, RXL.PA, SCHW, SKX, SLB, SONY, SW.PA, ULVR.L, UNH, ZION | Banking, contrarian, Crisis, Housing, international, Quality, value |
ZBRA SCHW AAPL|MSFT|NFLX|NVDA|UNH AEO|ASH|ASUR|AZZ|DCO|FA|FBIN|GHM|LEU|NSP|RRR|UTZ BKNG |
FMI takes a contrarian approach during Q1 2023's banking crisis and growth stock speculation. They defend selective banking exposure while adding to housing positions during pessimism, seeing secular tailwinds from underbuilding and aging stock. The firm criticizes deteriorating earnings quality and maintains discipline on quality businesses trading at discounts to intrinsic value. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIThe manager views AI as a speculative bubble with extraordinarily high valuations and minimal room for error. They believe AI capex spending is driven by FOMO rather than ROI-based decisions, and that the math for hyperscalers to generate adequate returns is challenging. The manager is positioned to benefit from AI on the cost side through portfolio companies that could realize productivity gains, rather than owning companies selling into the AI investment cycle. |
Semiconductors Data Centers Cloud Hyperscalers Productivity |
SemiconductorsThe semiconductor sector experienced its best quarter ever with the Philadelphia Stock Exchange Semiconductor Index gaining 88% in Q2 and 102% YTD. The manager notes that semiconductor weight in the S&P 500 is at an all-time high, with median enterprise value-to-sales valuations over four standard deviations above historical averages. They characterize this as speculative excess that has historically marked major market peaks. |
Chips Valuations Memory AI Semis | |
ValueThe manager is finding compelling value opportunities in traditional businesses with real earnings and modest valuations that have been overlooked during the AI frenzy. They own businesses with durable competitive advantages, high returns on invested capital, strong management, and conservative balance sheets trading at meaningful discounts to intrinsic value. The valuation gap between the AI complex and the rest of the market now rivals levels last seen at the height of the dot-com bubble. |
Valuation Gap Intrinsic Value Quality Discounts | |
Capital MarketsThe manager discusses FTI Consulting as a specialist consulting firm delivering mission-critical work that is insulated from AI disruption. They view the company's niche in crisis management and business transformation as defensible, with the recent employee defection being an isolated incident. The manager also highlights Houlihan Lokey as a position that could benefit from AI on the cost side. |
Consulting Advisory Restructuring | |
QualityQuality Compounders tracked by Goldman Sachs fell by 1% YTD while AI themes skyrocketed, creating a significant performance gap. The manager views this as an opportunity, noting that their portfolios own businesses with durable competitive advantages, high returns on invested capital, strong management, and conservative balance sheets. They believe these quality characteristics are not being reflected in current valuations. |
Compounders ROIC Competitive Advantages Balance Sheets | |
| 2026 Q1 |
DefenseDefense companies have outperformed broader market indices over the long term. Russia's invasion of Ukraine in 2022 became a major shot in the arm for European defense, meaningfully altering the spending trajectory for Germany and several others. The broadening conflict in the Middle East certainly helps the cause. |
Defense Spending Geopolitical Military Government Europe |
OilThe Iran war has led to the blockage of the Strait of Hormuz, causing the largest supply disruption in the history of the global oil market. Oil eclipsed $100 per barrel with fears it could spike significantly higher if the conflict drags on. Energy companies have outperformed in recent periods but face boom-and-bust cycles. |
Energy Geopolitical Supply Disruption Commodities Volatility | |
Home ImprovementFMI has overweight exposure to durables and manufacturing end-markets, specifically geared towards building materials, housing and construction. The housing repair and remodel market has an attractive long-term set-up due to aging housing stock, mortgage rate lock-in effects, and record home equity levels creating financial capacity to invest in homes. |
Housing Construction Building Materials Renovation Demographics | |
AIBoth Huron Consulting and Booking Holdings have sold off on artificial intelligence concerns, which FMI thinks are overblown and misunderstood. Huron views AI as a revenue opportunity while leveraging the technology internally to reduce costs. AI is unlikely to recreate Booking's global network of hotels given extreme fragmentation of supply. |
Technology Disruption Consulting Travel Innovation | |
| 2025 Q4 |
AIFMI views AI as creating a massive bubble with unsustainable capital spending and circular funding dynamics. They see tremendous long-term potential but question whether enormous capital investments will generate attractive returns, comparing current dynamics to the dot-com crash. The firm actively avoids AI infrastructure investments due to valuation concerns and structural issues. |
Artificial Intelligence Technology Valuations Bubble Infrastructure |
QualityFMI emphasizes their focus on quality businesses with sustainable competitive advantages, strong balance sheets, and returns above cost of capital. They note quality has underperformed in the current junk rally but maintain confidence in their quality-focused approach, viewing current headwinds as a historical anomaly that will reverse. |
Quality Value Balance Sheet Competitive Advantage ROIC | |
Small CapsThe firm highlights how small cap active managers have struggled during the junk rally, where companies that lose money or have low ROE have dominated since April 2025. FMI acknowledges their small cap portfolios have generated solid double-digit returns but haven't kept pace with broader indices given the current market backdrop favoring low-quality names. |
Small Cap Active Management Russell 2000 Underperformance | |
ValueFMI advocates for Quality Value investing, showing how cheap stocks with high quality metrics have outperformed over the long term despite recent headwinds. They emphasize buying advantaged businesses at discount valuations as a winning formula, noting that rallies like the current one are typically short-lived. |
Value Quality Value Discount Intrinsic Value Margin of Safety | |
| 2025 Q3 |
AIFMI expresses skepticism about the massive AI capital expenditure cycle, comparing it to the fiber optic overbuild of 2000. While acknowledging AI's long-term potential, they question whether the colossal spending will generate attractive returns, noting that AI monetization remains limited despite nearly $400 billion in annual capex from five mega cap tech companies. |
Artificial Intelligence Capital Expenditure Technology Datacenter Monetization |
ValuationsThe firm highlights that current stock markets represent one of the most expensive in U.S. history, with eight traditional valuation metrics hitting record highs. They note the fundamental disconnect between record market valuations and weakening economic fundamentals across global economies. |
Market Valuation Expensive Markets Historical Metrics Bubble Disconnect | |
QualityFMI emphasizes their focus on quality businesses with strong balance sheets trading at discounts to benchmarks. They specifically target quality compounders and highlight defensive attributes in their portfolio holdings, contrasting this approach with the market's current preference for speculative investments. |
Quality Businesses Balance Sheets Compounders Defensive Fundamentals | |
| 2025 Q2 |
AIWhile AI has tremendous long-term potential and could be revolutionary, FMI is skeptical about the colossal capital expenditure being deployed. They compare it to the fiber optic overbuild in 2000, where massive overbuilding led to overcapacity. Five mega cap tech companies are on pace to spend nearly $400 billion in capex, yet AI monetization remains limited with AI-native revenues believed to be less than $20 billion total. |
Artificial Intelligence Capex Technology Datacenter Revenue |
ValuationsFMI states they are currently in one of the most expensive stock markets in U.S. history. Eight traditional valuation metrics over the last 125 years hit the highest level on record before September's market advance. Record valuations present significant risk despite continued market enthusiasm. |
Expensive Metrics Historical Risk Overvaluation | |
QualityFMI focuses on quality businesses with strong balance sheets that trade at a discount to benchmarks. They emphasize business quality, balance sheet strength, and valuation in their investment approach. Quality compounders have been left behind in the current market environment dominated by AI and speculative themes. |
Balance Sheet Discount Compounders Strength Fundamentals | |
| 2025 Q1 |
ValueFMI takes comfort holding portfolios of durable businesses trading at discount valuations with strong cash flow. They welcome increased market volatility as it creates opportunities for value investors after a period where momentum dominated and individual security selection was an afterthought. |
Discount Durable Cash Flow Undervalued Opportunities |
AIThe artificial intelligence boom helped fuel market pullback as skepticism emerged. AI has sucked the air out of the room and pulled investment away from other areas of technology. AI high-flyers like Super Micro and Palantir have fallen significantly from recent highs. |
Artificial Intelligence Technology Speculation Bubble Correction | |
Trade PolicyTrump's whipsaw approach to trade policies has created a difficult environment for companies to navigate with very little CEO visibility. Protectionism has a dismal economic track record and tariffs operate like a tax on citizens, likely to be inflationary and risk stagflation. |
Tariffs Protectionism Stagflation Uncertainty Policy | |
Defense SpendingDefense was the top performing theme in Europe in Q1, up 69.7%. Germany announced defense and infrastructure spending that could exceed €1 trillion over the coming decade, while the EU Commission proposed a €800 billion ReArm Europe plan. |
Military Europe Germany Spending Geopolitical | |
CryptoCryptocurrencies lost $1 trillion in market cap since December, with MicroStrategy down 41.5% from its 52-week high. The chart illustrates stark similarity between technology and cryptocurrencies direction, speaking to basket traders' lack of differentiation. |
Bitcoin Speculation Correction Volatility Correlation | |
| 2024 Q2 |
AIThe manager expresses skepticism about the AI bubble, noting that Nvidia's rapid growth and high margins will attract competition from customers. They warn of speculative fervor around AI with over $180 billion in data center spending but only $3.4 billion in OpenAI revenue. The cost to run generative AI queries is extremely high due to power requirements. |
Nvidia Data Centers Generative AI Speculation Bubble |
ValueThe manager emphasizes their commitment to value investing despite current underperformance, stating that value has a 100+ year track record and will be back on top before long. They view the current environment where investors are giving up on value as making them more excited about the future. |
Value Investing Outperformance Long-term Contrarian Quality | |
Small CapsSmall Cap stocks have underperformed Large Cap for the longest stretch on record (158 months) with the largest spread (-219.4%). The manager notes that profitable Small Cap companies now trade near the lowest level to profitable Large Cap companies in over 20 years, suggesting brighter days ahead. |
Russell 2000 Underperformance Valuation Quality Opportunity | |
QualityThe manager's focus on quality has paid off in recent years as the Russell 2000 has over 40% of constituents losing money. They estimate only about 20% of the Russell 2000 both make money and are liquid, making quality investing more challenging but valuable. |
ROCE Profitability Liquidity Russell 2000 Selection | |
| 2024 Q1 |
ValueFMI emphasizes investing in advantaged companies trading at discounts to intrinsic value for temporary reasons. Small Cap and International stocks continue to trade at meaningful discounts with relative valuations around two standard deviations below historical levels. The setup appears favorable for value-oriented investing. |
Discount Intrinsic Undervalued Relative Cheap |
QualityThe firm maintains focus on business quality, avoiding money-losing businesses which comprise roughly 40% of Russell 2000 constituents. They seek well-run, durable businesses with robust balance sheets as a prerequisite for investments. Quality compounders trailed the market yet again in Q1. |
Balance Sheet Durable Profitable Fundamentals Strength | |
ConstructionFMI has leaned into high-quality businesses with exposure to housing and construction materials across portfolios. Holdings include Simpson Manufacturing, Fortune Brands, Beacon Roofing Supply, nVent Electric, Carlisle, Carrier Global, Ferguson, Eaton, and Masco. These came under pressure due to cyclical concerns and rising interest rates. |
Housing Materials Cyclical Building Infrastructure | |
| 2023 Q4 |
ValueFMI emphasizes their value discipline and business quality focus, noting that Quality Compounders were up only 8% in 2023 while speculative themes dominated. They believe this dichotomy is unsustainable and that their approach of owning quality businesses at discount valuations will be rewarded. |
Quality Discount Valuations Compounders Business Quality |
Small CapsThe letter highlights that U.S. Small Cap stocks significantly underperformed in 2023, with the S&P 500 versus Russell 2000 spread being the third worst year in history since 1979. FMI notes that profitable U.S. Small Cap stocks are trading near all-time high discounts to their U.S. Large Cap counterparts. |
Russell 2000 Underperformance Discounts Profitable Spreads | |
Credit StressThe letter extensively discusses debt-related risks, noting global debt reached a record $307 trillion and highlighting the approaching debt maturity wall with $2.5 trillion of high yield bonds and leveraged loans coming due between 2025-2028. Interest rates may double or triple for some companies when refinancing. |
Debt Refinancing High Yield Maturity Wall Interest Expenses | |
| 2023 Q3 |
ValueFMI emphasizes value investing opportunities across geographies, noting that global value stocks are trading near historically wide discounts to growth. The firm expects any reversion to the mean should result in brighter days for value-oriented investors, with attractive relative values outside mega-cap companies. |
Value Discount Growth Reversion |
Small CapsThe discount for U.S. Small Caps versus U.S. Large Caps is near an all-time high. FMI sees compelling opportunities in small cap stocks, which have been left behind by the concentration in mega-cap companies that dominate S&P 500 performance. |
Small Caps Discount Valuation Opportunity | |
DefensivesDespite weakening economic backdrop, cyclical stocks have outperformed defensives over the past year. FMI finds interesting opportunities among defensive stocks that have been left behind, adding new defensive positions including Valvoline, Sysco, and Coca-Cola Europacific Partners. |
Defensives Cyclicals Opportunity Stability | |
| 2023 Q2 |
AIGenerative AI has lit the technology sector ablaze and has potential to be a game-changer, but is in early adoption stages. Commercial revenue projections over next five years could be overblown despite the hype. The manager questions whether current AI winners will be tomorrow's winners, citing historical precedent. |
Artificial Intelligence Technology Generative Revenue Adoption |
ValueValue investing has nearly 100 years of success but is currently in one of worst periods on record. The manager has great confidence value will win out due to human nature and market cycles. Valuation premium for growth versus value is near 50-year high, suggesting better days ahead for value orientation. |
Value Investing Cycles Outperformance Valuation Premium | |
Small CapsProfitable US Small Cap stocks are trading close to largest discount to US Large Cap stocks in over 40 years. Quality has been hard to come by in Small Cap space with extensive M&A activity by private equity thinning the opportunity set. Disciplined stock picking has been critical. |
Small Cap Discount Valuation Quality Opportunity | |
EuropeEuropean stocks now trade at all-time discount to the US. While some discount is warranted due to weaker economic growth, GDP projections are more comparable going forward. A 30% cheaper valuation should give investors margin for error. |
European Stocks Discount Valuation GDP Margin | |
| 2023 Q1 |
BankingThe firm discusses the global banking crisis of Q1 2023, including failures of Silicon Valley Bank, Signature Bank, and Silvergate Capital. They maintain selective exposure to banks with sticky deposit bases like Zions and Schwab, viewing recent declines as overly punitive given their conservative balance sheets and quality management teams. |
Banking Credit Deposits Liquidity Risk |
HousingFMI takes a contrarian view on housing-related investments, seeing long-term secular tailwinds despite near-term pressures. They highlight underbuilding since the GFC, aging housing stock, and strong repair & remodel demand. The firm has added to housing-exposed positions like Fortune Brands during market pessimism. |
Housing Construction Real Estate Demographics | |
TravelThe firm views travel recovery positively, particularly highlighting Booking Holdings as benefiting from continued travel recovery with particular improvement in Europe. They see the company taking market share from competitors as the dust settles from COVID and Ukraine war impacts. |
Travel Recovery Europe Market Share | |
EarningsFMI expresses concern about deteriorating earnings quality across corporate America, citing a UBS study showing earnings expanding faster than cash flows. They criticize management teams for using aggressive accounting adjustments, particularly stock-based compensation in tech companies, to make earnings look better than reality. |
Earnings Quality Accounting Cash Flow |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 11, 2026 | Fund Letters | FMI Small Cap Equity | FCN | FTI Consulting Inc. | Consulting Services | Research & Consulting Services | Bull | New York Stock Exchange | AI-Resistant, Consulting, Crisis Management, Forensic Consulting, restructuring, Share Buybacks, small-cap, turnaround | Login |
| Jul 11, 2026 | Fund Letters | FMI Small Cap Equity | COF | Capital One Financial Corp | Credit Services | Consumer Finance | Bull | New York Stock Exchange | AI Beneficiary, Bank, cloud infrastructure, credit cards, founder-led, M&A Synergies, Payment Network, Share Buybacks | Login |
| Jul 11, 2026 | Fund Letters | FMI Small Cap Equity | FRD.MC | Fluidra S.A. | Other | Building Products | Bull | Bolsas y Mercados Españoles (Madrid) | Cyclical Recovery, Distributor, Europe, Manufacturer, pool equipment, Pricing power, recurring revenue, Spain | Login |
| Sep 30, 2025 | Fund Letters | FMI Small Cap Equity | OMF | OneMain Holdings Inc. | Financials | Consumer Finance | Bull | NYSE | Auto lending, consumer finance, credit cards, dividend, financials, Nonprime, Personal Lending, Scale Leader, turnaround, Value | Login |
| Sep 30, 2025 | Fund Letters | FMI Small Cap Equity | BDX | Becton Dickinson & Co. | Health Care | Health Care Equipment | Bull | NYSE | business separation, Consumables, defensive, growth, Healthcare Equipment, Manufacturing Scale, Medical devices, oligopoly, Quality, recurring revenue | Login |
| Sep 30, 2025 | Fund Letters | FMI Small Cap Equity | GRG.L | Greggs PLC | Consumer Discretionary | Restaurants | Bull | LSE | brand loyalty, Cash Flow Inflection, Consumer Discretionary, Food Retail, Restaurants, store expansion, Supply Chain Investment, UK, Value, vertically integrated | Login |
| Jun 30, 2025 | Fund Letters | Jonathan T. Bloom | NSIT | Insight Enterprises Inc. | Information Technology | Electronics & Computer Distribution | Bull | NASDAQ | buybacks, cloud, IT services, Modernization, scale | Login |
| Jun 30, 2025 | Fund Letters | Jonathan T. Bloom | MAS | Masco Corp. | Industrials | Building Products & Equipment | Bull | NYSE | brands, Free Cash Flow, Remodeling, ROIC, valuation | Login |
| Mar 31, 2025 | Fund Letters | FMI Small Cap Equity | FCFS | FirstCash Holdings, Inc. | Consumer Discretionary | Consumer Finance | Bull | NASDAQ | consolidation, consumer finance, Counter-cyclical, defensive, Equity, Mexico, Pawn, Value | Login |
| Mar 31, 2025 | Fund Letters | FMI Small Cap Equity | ALLE | Allegion Public Limited Co. | Industrials | Building Products | Bull | NYSE | aftermarket, Building Products, Cyclical, Electronic Products, Equity, oligopoly, Security Hardware, Value | Login |
| Mar 31, 2025 | Fund Letters | FMI Small Cap Equity | SW.PA | Sodexo S.A. | Consumer Discretionary | Hotels, Restaurants & Leisure | Bull | Euronext Paris | Catering, Equity, Europe, Facilities Management, family-controlled, Geographic Diversification, Outsourcing | Login |
| Dec 31, 2024 | Fund Letters | FMI Small Cap Equity | HAYW | Hayward Holdings Inc. | Consumer Discretionary | Leisure Products | Bull | NYSE | barriers to entry, Consumer Discretionary, contrarian, Cyclical, Manufacturer, pool equipment, Pricing power, Repair Replacement, Residential | Login |
| Dec 31, 2024 | Fund Letters | FMI Small Cap Equity | IPG | Interpublic Group of Cos. Inc. | Communication Services | Advertising | Bear | NYSE | advertising, Capital-light, Client Defection, Communication Services, Free Cash Flow, holding company, Integration-Risk, M&A, merger | Login |
| Sep 30, 2024 | Fund Letters | FMI Small Cap Equity | ARMK | Aramark | Consumer Discretionary | Diversified Consumer Services | Bull | NYSE | defensive, Facilities Management, Food Services, Margin recovery, market share gains, operating leverage, Scale Advantages, supply chain, turnaround | Login |
| Sep 30, 2024 | Fund Letters | FMI Small Cap Equity | FN | Fabrinet | Information Technology | Electronic Manufacturing Services | Neutral | NYSE | AI infrastructure, Customer concentration, Datacom, Electronic Manufacturing, High Complexity Manufacturing, NVIDIA, Optical-Components, Telecom, Valuation Discipline | Login |
| Jun 30, 2024 | Fund Letters | FMI Small Cap Equity | HSIC | Henry Schein Inc. | Health Care Equipment & Services | Health Care Distributors | Bull | NASDAQ | Aging demographics, Cyber Recovery, Dental, Healthcare Distribution, Medical Distribution, Practice Management Software, Value | Login |
| Jun 30, 2024 | Fund Letters | FMI Small Cap Equity | DGX | Quest Diagnostics Inc. | Health Care Equipment & Services | Health Care Services | Bull | NYSE | Aging demographics, Clinical Laboratory, Cost advantage, defensive, Healthcare services, Preventative Healthcare, Value | Login |
| Jun 30, 2024 | Fund Letters | FMI Small Cap Equity | RYAAY | Ryanair Holdings PLC | Transportation | Airlines | Bull | NASDAQ | Airlines, Boeing Delays, Cost advantage, Europe, Fleet Shortage, Low-Cost Carrier, market share, Value | Login |
| Mar 31, 2024 | Fund Letters | FMI Small Cap Equity | GTES | Gates Industrial Corp. PLC | Industrials | Industrial Machinery | Bull | NYSE | Automotive Aftermarket, Belts, industrial machinery, margin expansion, Power Transmission, Private Equity Overhang, Replacement Markets, Value | Login |
| Mar 31, 2024 | Fund Letters | FMI Small Cap Equity | SCHW | Charles Schwab Corp. | Financials | Investment Banking & Brokerage | Bull | NYSE | Banking Crisis Recovery, Discount Brokerage, economies of scale, financial services, market share gains, Normalized Earnings, Value | Login |
| Mar 31, 2024 | Fund Letters | FMI Small Cap Equity | WEIR.L | Weir Group PLC | Industrials | Industrial Machinery | Bull | LSE | Aftermarket revenue, business transformation, Cyclical Resilience, Mining Technology, operating leverage, Razor-Blade Model, UK, Value | Login |
| Dec 31, 2023 | Fund Letters | FMI Small Cap Equity | BJ | BJ's Wholesale Club Holdings Inc. | Consumer Staples | Hypermarkets & Super Centers | Bull | NYSE | consumer staples, market share expansion, membership model, recurring revenue, retail, turnaround, Value, Warehouse club | Login |
| Dec 31, 2023 | Fund Letters | FMI Small Cap Equity | CARR | Carrier Global Corp. | Industrials | Building Products | Bull | NYSE | heat pumps, HVAC, Industrials, Management Change, oligopoly, portfolio transformation, spin-off, turnaround, Value | Login |
| Dec 31, 2023 | Fund Letters | FMI Small Cap Equity | DGE.L | Diageo PLC | Consumer Staples | Distillers & Vintners | Bull | LSE | brand portfolio, consumer staples, Emerging markets, Heritage Brands, premium brands, premiumization, Spirits, UK, Value | Login |
| Sep 30, 2023 | Fund Letters | FMI Small Cap Equity | VVV | Valvoline Inc. | Consumer Discretionary | Specialty Retail | Bull | NYSE | Automotive Services, Defensive growth, franchise model, market share gains, Quick Lube, Specialty retail, Synthetic Oils, turnaround | Login |
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| TICKER | COMMENTARY |
|---|---|
| FCN | FTI Consulting is a leading global consulting firm specializing in crisis management and business transformation, with more than 8,100 employees across 32 countries and territories. The company operates through five segments: Corporate Finance and Restructuring, Forensic and Litigation Consulting, Economic Consulting, Strategic Communications, and Technology. Roughly 64% of revenue is domestic, with the remaining 36% generated internationally. FTI's competitive advantages are well-established: a strong track record, respected brand, broad capabilities, and deep subject-matter expertise across its segments. Together, these qualities underpin a durable consulting franchise with a track record of organic growth. Against that backdrop, two headwinds have weighed on the shares and created our entry point. First, a rare defection by a group of Economic Consulting employees in early 2025 caused financial disruption and reputational damage. Second, broader concerns about AI displacing the consulting model have pressured FTI's valuation. We view both risks as largely misunderstood or already resolved. The defection appears to be an isolated incident that the company has effectively put behind it. On AI, FTI's niche as a specialist consultant delivering mission-critical work (most often for clients in the middle of a crisis) insulates it far more than most other consulting models. We believe management's target of at least mid-single-digit organic EBITDA growth is achievable. Capital allocation has been sound, highlighted by a mid-teens reduction in shares outstanding in 2025, with buybacks continuing into 2026 as the stock remains depressed. We see the valuation as compelling within an otherwise expensive small-cap market. |
| COF | Capital One is one of the largest banks and card issuers in the U.S. Our investment thesis centers on Capital One's acquisition of Discover. Meaningful value creation could come from cost synergies and converting a portion of Capital One's card portfolio to Discover's network. Importantly, these synergies require no additional capital or credit risk and should increase returns while reducing earnings cyclicality relative to Capital One on a standalone basis. Over the longer term, there is a potentially game-changing opportunity to build a more competitive network to challenge Visa and Mastercard. Capital One is also uniquely positioned to benefit from AI: the bank operates on a modern, fully cloud-based technology infrastructure, a rarity in the industry. AI could drive value across marketing efficiency, credit underwriting, fraud detection, and customer service. We forecast accelerated earnings growth and higher returns versus history. We think that the stock should re-rate as investors appreciate Capital One's transformation. Finally, we have a favorable view of the management team led by founder Richard Fairbank and expect that capital allocation will be skewed toward share repurchases given the discounted valuation and overcapitalized balance sheet. |
| FRD.MC | Fluidra is a global pool equipment manufacturer and distributor focused primarily on the residential pool market. Its product portfolio spans pumps, automation, sanitization, heaters, filters, lighting, water features, cleaners, pool chemicals, and more. Roughly 70% of revenue is tied to the existing installed base of pools, most of which is repair and replacement, making the business resilient to economic cycles. Fluidra also benefits from strong pricing power: purchase decisions are typically made by pool service professionals rather than end consumers, and these professionals tend to be price-insensitive and brand-loyal, gravitating toward established industry leaders. The result is a business with high margins and strong returns on invested capital. The pool industry saw an outsized surge in demand in the early years of COVID, followed by a sharp reversal as end-market activity weakened and the distribution channel worked through elevated inventory. That destocking cycle has largely run its course, though demand for new pool construction and remodels remains soft. Over time, we expect the more discretionary segments of the business to recover. In the interim, Fluidra should continue to grow through price increases and volume gains within the installed base and expand earnings through cost reduction efforts. The company has a solid balance sheet, is led by a capable management team, and trades at an attractive valuation. |
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