| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 0% | 0% |
| 2025 |
|---|
| 45.4% |
Immersion Investment Partners is capitalizing on AI-driven market dislocations that have created mispricing opportunities in small-cap technology and consumer stocks. The fund maintains a concentrated approach with 86% of assets in five core holdings: Bel Fuse, Celsius Holdings, Dutch Bros, Mama's Creations, and Red Violet. The managers argue that massive AI infrastructure spending with questionable near-term ROI has led the market to broadly punish technology companies, creating opportunities in quality businesses with strong fundamentals. Dutch Bros represents their largest new position, offering exceptional unit economics and growth potential in the restaurant space. Par Technology, despite declining 50% in 2025, remains attractive given its mission-critical software platform and improving fundamentals. Mama's Creations delivered exceptional results with 50% sales growth and new national distribution wins. The portfolio strategy focuses on identifying companies with differentiated competitive positions trading at attractive valuations due to temporary market sentiment rather than fundamental deterioration. The managers emphasize patience and conviction as key drivers of long-term outperformance.
AI infrastructure spending has created broad-based mispricing in technology stocks, particularly punishing small-cap companies without direct AI disruption risk, creating asymmetric investment opportunities for disciplined capital allocators willing to invest in quality businesses trading at attractive valuations.
The managers express optimism about capitalizing on AI-driven mispricing in small-cap technology stocks. They believe patience and conviction will be rewarded as the market eventually reprices quality companies trading at attractive valuations. The tone suggests confidence in their concentrated approach and ability to identify undervalued opportunities created by broad market sentiment.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 30 2026 | 2025 Q4 | BELFB, BROS, CAVA, CELH, CMG, DPZ, MAMA, PAR, RDVT, SBUX, TGT, WING | AI, Food, growth, Restaurants, small caps, tech, Valuations |
PAR MAMA BROS |
Immersion Partners is capitalizing on AI-driven mispricing in small-cap tech and consumer stocks. Their concentrated portfolio of five core holdings includes Dutch Bros, a compelling restaurant concept with exceptional unit economics, and undervalued software companies like Par Technology. The strategy focuses on quality businesses with strong fundamentals trading at attractive valuations due to broad market sentiment rather than company-specific issues. |
| Oct 20 2025 | 2025 Q3 | CELH, MAMA, PBPB, RDVT | Acquisitions, Beverages, Distribution, Food, growth, small caps, value |
CELH MAMA CELH MAMA |
Immersion Partners gained 18.4% in Q3 2025 through concentrated small-cap investing, targeting undervalued companies with strong fundamentals creating coiled spring effects. Major developments include Celsius gaining energy drink distribution control from PepsiCo and Mama's Creations acquiring Crown I Enterprises, both positioned for significant earnings growth as market recognition catches up to operational improvements. |
| Aug 19 2025 | 2025 Q2 | CELH, MAMA, PBPB, RDVT, UFPT | Food, fundamentals, growth, Microcap, small caps, value, volatility |
MAMA MAMA |
Immersion Partners delivered 28.13% returns in Q2 2025 by investing in overlooked small-cap companies where fundamental improvements create coiled spring effects. Their concentrated approach focuses on businesses like Mama's Creations, benefiting from prepared foods category growth and strong management execution, while maintaining that volatility differs from true investment risk. |
| May 15 2024 | 2024 Q1 | BELFB, CELH, GFF, PBPB | concentrated, long-term, Patient Capital, small caps, value | - | Immersion Partners outperformed the Russell 2000 by 444 basis points in Q1 2024, maintaining concentrated exposure to fifteen small-cap positions. The fund exploits short-term market inefficiencies by providing patient capital to overlooked companies, with their five largest investments comprising 75% of assets. Management emphasizes time arbitrage as their competitive advantage against short-term focused institutional investors. |
| Feb 2 2024 | 2023 Q4 | EDR.MC, GFF, PBPB | execution, mispricing, small caps, turnaround, value |
EDR.MC AAGFF ALTG|AREN|CVGI|PBPB|QBTS|QMCO|SCOR|TURN |
Immersion delivered 34.69% returns in 2023 by investing in overlooked small-cap companies with strong fundamentals. Their concentrated portfolio targets mispriced businesses where management execution eventually drives market recognition. Key holdings like eDreams subscription transformation, Griffon's improved governance, and Potbelly's franchise turnaround demonstrate their strategy of finding quality companies before the market catches up. |
| Nov 22 2023 | 2023 Q3 | BELFB, CELH | Beverages, Components, small caps, turnaround, undervalued, value | - | Small cap value fund targeting overlooked companies with structural improvements trading at generational lows. Russell 2000 at 12.5x P/E versus 18.1x average presents historic opportunity. Top holdings Bel Fuse (electronic components turnaround) and Celsius (energy drinks gaining share) demonstrate strong fundamentals despite market indifference. Fund confident that math wins long-term as quality businesses get recognized. |
| Jan 7 2023 | 2023 Q2 | BFIT.AS, FC, IDT, MPAA, PBPB | Auto Aftermarket, Fitness, Restaurants, small caps, special situations, turnaround, value | - | Immersion delivered 22.3% in Q2 by largely holding their concentrated small cap portfolio of coiled springs. Small caps trade at dot-com bubble-level discounts to large caps despite strong fundamentals. New holding MPAA offers significant earnings inflection in auto aftermarket. Reduced European fitness play Basic-Fit and exited IDT completely. Opportunity set remains large in sub-$5B market cap universe. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIManager views AI as a classic capital cycle bubble comparable to past infrastructure manias. Sees massive capital spending with improbable returns, creative financing, and circular dynamics among hyperscalers. Expects this to end badly for early investors despite potential societal benefits. |
Artificial Intelligence Data Centers Capital Cycle Bubble Infrastructure |
ValuePortfolio trades at 12.2x earnings with 8.2% earnings yield versus S&P 500's 26x multiple and 3.9% yield. Active value management through trimming expensive positions and adding to undervalued names has driven outperformance. Sees significant valuation disparity favoring value approach. |
Value Investing Earnings Yield Active Management Undervalued Valuation | |
GoldGold mining companies Kinross and Newmont delivered exceptional returns with gold reaching $5,000 per ounce. Mining profitability surged with net margins rising to 30%+ range. Maintains constructive long-term view on gold price for various unfortunate macroeconomic reasons. |
Gold Miners Precious Metals Commodity Cycle Mining Inflation Hedge | |
Dollar StoresIncreased allocation to retailers including Dollar General, Dollar Tree, and Five Below from 17.1% to 25.9% of portfolio. Added meaningfully to Five Below near yearly lows during tariff volatility. These retailers earn good returns on capital despite modest profit margins. |
Retail Dollar Stores Consumer Discretionary Tariffs Value | |
CloudViews cloud infrastructure spending as part of broader AI capital cycle excess. Sees formerly capital-light tech companies now in arms race that leverages balance sheets and gobbles up resources. Questions sustainability of massive data center investments and energy requirements. |
Cloud Computing Data Centers Infrastructure Capital Intensity Tech | |
| 2025 Q3 |
Small CapsThe fund focuses exclusively on smaller companies by market cap that are often less followed and less liquid. These companies create opportunities for violent outperformance when fundamentals are recognized by the market, creating a coiled spring effect where good news accumulates until it erupts violently once people take notice. |
Russell 2000 Market Cap Liquidity Coverage Institutional |
BeveragesCelsius Holdings represents a major position with significant developments including strengthened partnership with PepsiCo, acquisition of distribution control for energy drinks, and expected dramatic improvement in market share. The Alani brand alone is expected to generate $300mm in adjusted EBITDA growth in 2026. |
Energy Drinks Distribution Market Share PepsiCo Alani | |
FoodMama's Creations acquired Crown I Enterprises for $17.5 million, adding $56 million in sales and production capacity. The deal provides legitimacy to their acquisition strategy and could result in $30 million in consolidated adjusted EBITDA versus current street estimates of just $21 million. |
Prepared Foods Acquisition Production EBITDA Growth | |
| 2025 Q2 |
FoodFresh and prepared foods in grocery stores has been a growing category, catalyzed by consumer demand for healthier, fast, and affordable food options. Grocery stores have been increasingly dedicating more food space to the category. Today, it is one of only a couple of categories that are seeing volume growth. |
Prepared Foods Grocery Food Manufacturing Branded Products Food Distribution |
Small CapsThe fund focuses on smaller companies by market cap that are often less followed and less liquid. These names can experience pronounced coiled spring effects when good news accumulates but isn't priced in, leading to violent eruptions once people take notice. The inverse creates opportunity during macro risk-off trades. |
Microcap Volatility Liquidity Institutional Ownership Coverage | |
ValueThe fund focuses on fundamentals of companies and what they are doing internally, rather than judging them based on quarterly stock price performance. They seek companies where good news is not priced in quarter over quarter, creating coiled spring effects. |
Fundamentals Mispricing Intrinsic Value Long Term Contrarian | |
| 2024 Q1 |
Small CapsFund focuses on small-cap investments with market capitalizations ranging from $30 million to $17 billion, with a median of $600 million. The strategy targets overlooked and underappreciated companies that are too small for institutional investors. |
Small Cap Undervalued Overlooked Institutional |
ValueThe fund employs a value-oriented approach, seeking companies trading below intrinsic value due to temporary issues or market misunderstanding. They focus on patient capital deployment and long-term value realization. |
Value Undervalued Patient Capital Long-term | |
| 2023 Q4 |
TraveleDreams Odigeo is transforming into the first subscription-led online travel agency with 5.1 million Prime members, generating recurring cash flow and circumventing middlemen like Google. The company delivered strong Q2 results with revenue and EBITDA up 19% and 66% respectively, showing significant margin expansion potential. |
Online Travel Subscription Travel |
RestaurantsPotbelly continues executing its turnaround under new management, with each location averaging $1.3 million in annual sales and nearing mid-teens store-level operating margins. The company announced 192 total location commitments and is shifting from a regional company-operated concept to a fast-growing franchised business with national scale. |
Franchising Turnaround Restaurant | |
| 2023 Q3 |
Small CapsSmall cap stocks are trading at generational lows with the Russell 2000 at 12.5x P/E versus 18.1x long-term average. The fund sees this as a historic opportunity to buy well-heeled companies at depressed prices due to non-fundamental selling pressures. |
Russell 2000 Valuations Opportunity Generational Depressed |
ValueThe fund focuses on finding companies with structural changes being overlooked by the market, often trading at single-digit multiples despite strong fundamentals. They emphasize buying quality businesses at discounts when others are selling for non-business reasons. |
Undervalued Structural Changes Overlooked Discounts Quality | |
BeveragesCelsius Holdings represents a major position as an energy drink company growing market share to 6% nationally while achieving 20%+ share in mature markets like Florida and Amazon. The company benefits from PepsiCo distribution partnership and targets international expansion. |
Energy Drinks Market Share Distribution Growth International | |
ComponentsBel Fuse is the fund's largest position, manufacturing electronic components for mission-critical applications in aerospace, military, and data centers. The company underwent operational improvements under new management, with margins recovering to peer levels. |
Electronic Components Mission Critical Aerospace Military Margins | |
| 2023 Q2 |
Small CapsSmall caps are at their largest relative discount to large caps since the dot-com bubble. The five years following the dot-com bubble produced some of the best returns in the history of public small cap investing. Investors have decided that all small cap stocks are risky regardless of prospective earnings/cash flow generation, quality of management, and cheap valuations. |
Small Caps Valuation Discount Russell 2000 |
Auto AftermarketMPAA benefits from an aging automotive fleet which requires more replacement parts. The company is the largest supplier of aftermarket starters and alternators in the U.S. with 50% market share. This is a reversion-to-the-mean setup with significant pricing power potential as customers have become overly dependent on companies like MPAA. |
Auto Parts Aftermarket MPAA Pricing Power | |
FitnessBasic-Fit is completely dominating its industry as the only concept of any reasonable scale growing gym count in its core markets. They have accelerated market share gains since COVID and are quickly reaching cash flow breakeven. However, European investors do not seem to care about this dominance. |
Fitness Basic-Fit Market Share Europe | |
RestaurantsPotbelly represents low-hanging fruit with a fundamentally strong brand but subpar prior management. The entire board and c-suite has been turned over and the new team has embarked on realigning culture and basic operating practices. Annualized revenue per location is tracking to $1.35mm vs. pre-COVID levels of $950,000. |
Restaurants Potbelly Turnaround Management |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 30, 2026 | Fund Letters | David Polansky | PAR | Par Technology Corp. | Information Technology | Application Software | Bull | New York Stock Exchange | ARR, mispricing, operating leverage, Point of Sale, restaurant software | Login |
| Jan 30, 2026 | Fund Letters | David Polansky | MAMA | Mama’s Creations Inc. | Consumer Staples | Packaged Foods | Bull | NASDAQ | Distribution, Free Cash Flow, Margins, Prepared foods, retail expansion | Login |
| Jan 30, 2026 | Fund Letters | David Polansky | BROS | Dutch Bros Inc. | Consumer Discretionary | Restaurants | Bull | New York Stock Exchange | cash flow, Culture, expansion, Restaurants, Unit economics | Login |
| Oct 20, 2025 | Fund Letters | David Polansky | CELH | Celsius Holdings Inc. | Consumer Staples | Beverages | Bull | NASDAQ | Beverages, Distribution, EBITDA, Energy drinks, growth, Margins, market share, Partnership, PepsiCo, Re-rating | Login |
| Oct 20, 2025 | Fund Letters | David Polansky | MAMA | Mama’s Creations Inc. | Consumer Staples | Packaged Foods | Bull | NASDAQ | acquisition, Deli, EBITDA, Food, growth, Integration, M&A, Prepared foods, scale, valuation | Login |
| Oct 20, 2025 | Fund Letters | David Polansky | CELH | Celsius Holdings Inc. | Consumer Staples | Beverages | Bull | NASDAQ | Beverages, Distribution, EBITDA, Energy drinks, growth, Margins, market share, Partnership, PepsiCo, Re-rating | Login |
| Oct 20, 2025 | Fund Letters | David Polansky | MAMA | Mama’s Creations Inc. | Consumer Staples | Packaged Foods | Bull | NASDAQ | acquisition, Deli, EBITDA, Food, growth, Integration, M&A, Prepared foods, scale, valuation | Login |
| Aug 19, 2025 | Fund Letters | David Polansky | MAMA | Mama's Creations, Inc. | Consumer Staples | Packaged Foods & Meats | Bull | NASDAQ | Acquisitions, Deli, EBITDA, grocery, management, Margins, Prepared, Scalability, valuation | Login |
| Jul 1, 2025 | Fund Letters | Immersion Investment Partners | MAMA | Mama's Creations | Consumer Staples | Packaged Foods & Meats | Bull | NASDAQ | Branded Products, cash generation, Consolidation Platform, convenience stores, Food Manufacturing, grocery retail, Management Quality, margin expansion, microcap, organic growth, Prepared foods | Login |
| Jan 1, 2024 | Fund Letters | Immersion Investment Partners | EDR.MC | eDreams Odigeo | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | Madrid Stock Exchange | cash generation, Europe, margin expansion, Mobile Bookings, Online Travel Agency, recurring revenue, subscription model, Travel Technology | Login |
| Jan 1, 2024 | Fund Letters | Immersion Investment Partners | AAGFF | Griffon Corp | Industrials | Building Products | Bull | NYSE | Building Products, capital allocation, Corporate Governance, Garage Doors, housing market, Margin Sustainability, restructuring, Value | Login |
| Jan 1, 2024 | Fund Letters | Immersion Investment Partners | ALTG|AREN|CVGI|PBPB|QBTS|QMCO|SCOR|TURN | Potbelly | Consumer Discretionary | Restaurants | Bull | NASDAQ | cash flow, franchise model, growth, Management Change, Restaurant Turnaround, Sandwich Concept, Unit economics, valuation discount | Login |
| TICKER | COMMENTARY |
|---|---|
| BELFB | The portfolio's top contributor for the quarter was Bel Fuse, which we subsequently sold out of entirely after owning shares, in varying sizes, for nearly three years. If given the opportunity to own Bel Fuse at a more reasonable price, we would not hesitate to be shareholders again. |
| BROS | Longer-term holdings such as Dutch Bros increased, outperforming benchmark returns |
| CAVA | CAVA, the Mediterranean restaurant chain, was the top performer in the Consumer Discretionary sector in the fourth quarter. The stock was under pressure for much of 2025, along with the entire restaurant industry, due to slowing growth trends. But CAVA's sales stabilized in the fourth quarter, prompting investors to recognize they had become too negative, and the share price rebounded nicely. Looking ahead, CAVA is planning to expand to 1,000 units in the United States by 2032, which is a solid growth target relative to its current base of ~450. |
| CELH | One such idea that we bought in the last quarter is Celsius Holdings. We will refrain from a full writeup today, given Elliot recently presented at MOI Global's Best Ideas 2026 Conference. |
| CMG | The top-five detractors from returns were Fiserv, Chipotle, Constellation Software, Roper, and Floor & Décor. In the quarter, we exited Fiserv, Chipotle, and monday.com. |
| MAMA | stocks scaling very nicely and entering the small-cap sweet spot (REAL, MAMA, CBLL, KRMD). |
| PAR | Software has always been a hyper-competitive industry teeming with well-funded start-ups. Consider PAR Technology's niche in restaurant point-of-sale (POS). Despite facing over 6,000 global competitors—including countless "free" alternatives requiring no subscription—PAR consistently wins mandates from Tier-1 restaurant chains. A prime example is their newly announced deal with Papa John's, which abandoned its in-house software to migrate to PAR. This dynamic runs 180° counter to the prevailing market narrative. AI will undoubtedly turn up the heat on this already intense global competition, but it will also accelerate PAR's product velocity, broaden its capabilities, and vastly expand its TAM. Ultimately, the endgame for incumbents is unlikely to be the race to zero gross margins that so many software skeptics are predicting. |
| RDVT | Red Violet (RDVT – Ugly Duckling) is one of our five largest holdings in alphabetical order. Companies like Red Violet and Par Technology, one of which has legally privileged and proprietary data streams and the other which creates and manages mission critical, intricate databases for transaction flows, are just a couple of the countless examples of babies being thrown out with the bathwater. |
| SBUX | Starbucks was sold during the quarter as it was not tracking to plan. |
| TGT | Target was sold during the quarter as it was not tracking to plan. |
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