| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 8.4% | 2.6% | 5.4% |
SouthernSun's small-cap strategy delivered -2.64% net returns in Q4 2025 versus Russell 2000's +2.19%, reflecting market preference for narrative momentum over fundamental breadth. Manager Phillip Cook draws extensive parallels between today's AI-driven environment and the 2014-15 oil collapse, warning that AI has become a macroeconomic assumption embedded across capital markets. Key risks include energy constraints on data centers, rising electricity costs, and grid limitations challenging scalability assumptions. The portfolio emphasizes businesses performing well fundamentally with strong balance sheets and resilient cash flows, though markets don't reward fundamentals linearly. Notable contributors included Advanced Energy Industries benefiting from AI-driven data center demand, while detractors like Crane NXT faced macroeconomic uncertainty despite solid operating performance. Manager initiated positions in CSW Industrials and Kadant while exiting Dycom and Timken. Looking ahead, Cook expects neither collapse nor uninterrupted progress but adjustment periods that restore market clarity, maintaining discipline in finding mispriced opportunities overlooked amid prevailing narratives.
Long-term value creation requires discipline and humility to recognize when markets may be viewing reality through distorted perception, particularly in late-cycle environments where confidence crowds out alternative interpretations of data.
Manager enters 2026 optimistic about the future yet mindful of historical lessons, seeing neither inevitability of collapse nor uninterrupted progress. Expects a landscape shaped by plausible scenarios including valuation compression, overcapacity periods, and macroeconomic crosswinds. Continues to find interesting opportunities in areas overlooked amid prevailing narratives, maintaining balance between optimism and discipline.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 25 2026 | 2025 Q4 | AEIS, BOOT, CSW, CXT, DAR, DORM, DY, EXTR, KAI, LPX, TKR, USPH | AI, energy, fundamentals, risk, small caps, valuation, value |
AEIS DAR CSW KAI DORM DY TKR |
SouthernSun's small-cap strategy underperformed in Q4 2025 as manager warns of AI bubble parallels to 2014-15 oil collapse. Portfolio emphasizes fundamentally strong businesses with resilient cash flows over speculation. Key risks include data center energy constraints and valuation multiples assuming flawless execution. Manager maintains disciplined approach, finding opportunities in areas overlooked by AI-focused markets. |
| Oct 30 2025 | 2025 Q3 | AEIS, BCO, CXT, DAR, DORM, EPAC, MOD, MSA, MUSA, NGVT, SCL | active management, industrials, materials, Quality, small caps, value |
BCO MOD DAR SCL CXT BCO MOD DAR SCL CXT |
SouthernSun's small-cap strategy returned 11.52% net in Q3 2025, focusing on quality companies with financial flexibility and niche dominance. Strong performance from Brink's and Modine offset weakness in Darling Ingredients. The firm initiated Crane NXT, emphasizing security technologies and recurring revenues. Management maintains disciplined value approach amid market divergences and geopolitical uncertainties. |
| Jul 17 2025 | 2025 Q2 | AEIS, BOOT, DAR, DY, EPAC, EXTR, LPX, MSA, MUSA, OXM, SAM | Agriculture, Capital discipline, Housing, Operational Discipline, small caps, tariffs, technology, value |
BOOT DY SAM MSA BOOT DY OXM SAM MSA |
SouthernSun's small-cap strategy outperformed in Q2 2025 by focusing on operationally disciplined companies navigating tariff pressures and macroeconomic uncertainty. The portfolio emphasizes cash-rich businesses pursuing strategic capital allocation while adapting supply chains away from China. Key themes include margin preservation, infrastructure spending benefits, and selective M&A opportunities emerging from market volatility. |
| Apr 25 2025 | 2025 Q1 | AEIS, AGCO, AWI, BOOT, DANH, EPAC, EXTR, IEX, LOB, MOD, NGVT, OXM, PII, SAM, TKR, USPH | Manufacturing, Quality, Resilience, small caps, tariffs, value |
EPAC TKR BOOT LOB EXTR MOD |
SouthernSun's Small Cap strategy underperformed in Q1 2025 amid tariff volatility but maintains conviction in fundamentally sound U.S. companies positioned for a market transition from speculation to substance. Despite near-term headwinds, the manager sees long-term opportunities in reshoring trends and value rotation, backed by decades of cycle-tested outperformance through patient, quality-focused investing. |
| Dec 31 2024 | 2024 Q4 | AEIS, AWI, BCO, DORM, LOB, MGPI, NGVT, OXM, PII, SAM, TKR, USPH | Cyclical, Patience, positioning, Research, small cap, value | - | SouthernSun's Small Cap Strategy underperformed in Q4 but delivered positive full-year returns through disciplined stock selection. The firm exited underperforming positions while adding semiconductor and apparel holdings. Management maintains cautious optimism for 2025, emphasizing patience and fundamental research amid market volatility and policy uncertainty. |
| Sep 30 2024 | 2024 Q3 | AGCO, BDC, BOOT, DORM, LOB, LPX, NGVT, SAM, SCL, USPH | Agriculture, AI, infrastructure, Onshoring, Resilience, small cap, technology, value |
LPX BOOT USPH NGVT |
SouthernSun's Small Cap Strategy delivered 10.38% net returns in Q3 2024, focusing on niche-dominant businesses with strong balance sheets positioned for infrastructure spending, AI adoption, and supply chain onshoring trends. The firm emphasizes financial flexibility and adaptable management teams to navigate geopolitical uncertainties and interest rate volatility while capturing long-term value creation opportunities. |
| Jul 20 2024 | 2024 Q2 | AGCO, BCO, BOOT, DAR, DY, EPAC, MGPI, MUSA, PII, USPH | Agriculture, Broadband, Energy Transition, HVAC, semiconductors, small caps, Turnarounds, value |
BOOT DY DAR USPH |
SouthernSun's small-cap strategy returned -3.69% in Q2 2024, closely tracking value benchmarks. The firm maintains conviction in its patient, fundamental approach despite economic headwinds, believing weakness is priced into small-cap valuations. Strong performance from broadband infrastructure play Dycom and retail expansion story Boot Barn offset renewable energy headwinds at Darling Ingredients. |
| May 17 2024 | 2024 Q1 | AWI, BDC, BOOT, DAR, DY, LOB, MBUU, MGPI, SAM, USPH | long-term, retail, small cap, SMID Cap, Spirits, Telecommunications, value |
DY BOOT MBUU MGPI |
SouthernSun's Small Cap Strategy outperformed benchmarks in Q1 2024, driven by telecommunications infrastructure and specialty retail holdings. Despite structural headwinds facing small-cap equities including peak margins and negative flows, the firm sees compelling opportunities for disciplined long-term investors. The concentrated portfolio approach focuses on high-quality businesses with sustainable competitive advantages and exceptional management teams. |
| Feb 20 2024 | 2023 Q4 | AWI, BDC, BOOT, DY, LOB, LPX, MGPI, PII, SAM, SCL | Banking, Elections, infrastructure, Onshoring, small cap, Telecommunications, value |
ARGX BB|DAVA|DDOG|GLOB|ILMN|LOAR|MELI|NET|NU|NVDA|TSM ABDY.L BBDC4.SA SAM |
SouthernSun's small cap strategy delivered solid 13.93% returns in 2023 despite macro volatility. The firm focuses on niche-dominant companies with strong balance sheets and adaptive management teams. Key holdings like Live Oak Bancshares and Dycom Industries are well-positioned for 2024 catalysts including potential rate cuts and infrastructure spending, while global election risks create both challenges and opportunities. |
| Sep 30 2023 | 2023 Q3 | BCO, BDC, DAR, DY, LOB, MUSA, SAM, SCL, TKR, USPH | consumer, energy, financials, industrials, infrastructure, small cap, value |
SAM AER|AWI|MUSA|NEU|SAIA|WTM ABDY.L ALDAR.AD |
SouthernSun's small cap strategy underperformed in Q3 but maintains strong long-term track record through disciplined fundamental analysis. Leadership transition to employee ownership completed successfully. Portfolio benefits from self-help stories like Boston Beer's operational improvements and Murphy USA's fuel margin expansion, while infrastructure plays like Dycom position for government spending catalysts in 2024. |
| Jun 30 2023 | 2023 Q2 | AGCO, BOOT, DAR, DORM, DY, MUSA, NGVT, SAM, SCL, THO, TSCO, UNVR, USPH | Auto Parts, Chemicals, healthcare, retail, small cap, Telecommunications, value |
DY USPH NGVT DORM BOOT |
SouthernSun's concentrated small-cap strategy outperformed benchmarks in Q2 2023, driven by telecommunications infrastructure and healthcare services winners. The team added Boot Barn, a dominant western retail chain with 900-store expansion potential, while exiting Univar post-acquisition. Near-term headwinds in specialty chemicals and auto aftermarket are viewed as temporary within longer-term positive industry trends. |
| Mar 31 2023 | 2023 Q1 | BCO, BDC, CLH, CR, DAR, LOB, MGPI, MUSA, SCL, TKR, UNVR, USPH | Banking, industrials, materials, Quality, small caps, value |
BCO TKR LOB DAR |
SouthernSun's small cap strategy outperformed benchmarks in Q1 2023 despite banking sector volatility. Manager maintains focus on niche-dominant companies with strong balance sheets and owner-oriented management. Top performers included Brink's and Timken, while Live Oak declined with broader banking sector. Strategy emphasizes quality companies with competitive advantages while remaining price conscious in current environment. |
| Dec 31 2022 | 2022 Q4 | AGCO, AWI, CR, DAR, DORM, EPAC, LOB, MGPI, TKR, UNVR | active management, Banking, Chemicals, Industrial, Quality, small caps, Transformation, value |
EPAC UNVR AWI DAR LOB |
SouthernSun's small cap strategy outperformed significantly in Q4 2022, driven by strong positions in industrial and chemical companies. The team believes current market conditions favor their disciplined value approach, with potential multi-year rotations from large to small caps and growth to value creating opportunities despite macro uncertainties. |
| Sep 30 2022 | 2022 Q3 | BCO, BDC, CLH, DAR, DORM, EPAC, MUSA, SCL, TKR, UNVR | Balance Sheet, energy, inflation, innovation, small cap, Supply Chain, technology, value |
MUSA DAR DORM BCO |
SouthernSun's small-cap strategy outperformed benchmarks in Q3 2022 despite macro headwinds, driven by energy and industrial holdings with strong competitive positions. The firm maintains elevated cash from recent exits while selectively deploying into quality businesses with proven economics. Management believes companies that survived the 2015-16 industrial recession now have distinct advantages in the current challenging environment. |
| Jun 30 2022 | 2022 Q2 | AGCO, COOK, CR, DAR, DORM, KOP, MGPI, MUSA, SAFM, SAM, SCL, UNVR | Balance Sheets, consumer, Industrial, inflation, Quality, small cap, value |
MGPI DORM DAR AGCO SAM |
SouthernSun's small cap strategy significantly outperformed in Q2 2022 despite challenging conditions, returning -7.54% versus Russell 2000's -17.20%. The team maintains focus on niche businesses with strong balance sheets and experienced management. While inflation concerns shifted to recession fears, they remain selective on valuations and emphasize businesses positioned to excel through operational efficiency and disciplined capital allocation. |
| Apr 1 2022 | 2022 Q1 | AGCO, COOK, DAR, SCL, THO, TMX | Agriculture, Chemicals, energy, Manufacturing, small cap, Travel, value |
AGCO DAR THO SCL COOK |
SouthernSun's small cap strategy outperformed in Q1 2022 despite market volatility, driven by agricultural equipment and renewable energy holdings. The team demonstrated active portfolio management by exiting Terminix post-acquisition and adding Traeger as a category-leading consumer brand. Management maintains their disciplined research approach, finding quality businesses at attractive prices while navigating supply chain and inflation headwinds. |
| Dec 31 2021 | 2021 Q4 | AEGN, AGCO, CCMP, DAR, DORM, DY, ENTG, EPAC, HRC, MGPI, PII, SAFM, STAY, THO, TMX, UNVR | consumer, Industrial, infrastructure, M&A, semiconductors, small cap, value |
CCMP DY THO PII |
SouthernSun's small cap strategy outperformed significantly in Q4 2021, led by semiconductor M&A and infrastructure spending themes. Record M&A activity across the portfolio demonstrates the quality of their niche-dominant holdings. Despite supply chain headwinds affecting some positions, the firm's disciplined approach and upgraded portfolio provide confidence for navigating expected continued market volatility. |
| Sep 30 2021 | 2021 Q3 | BCO, BDC, CCMP, DAR, EPAC, FTDR, HRC, MUSA, PII, THO, TKR, UNVR | COVID, industrials, inflation, Labor, small cap, Supply Chain, value |
HRC MUSA BCO TKR FTDR UNVR |
SouthernSun's small cap strategy outperformed in Q3 2021 despite supply chain and labor headwinds. Hill-Rom's acquisition validated their investment thesis while Murphy USA benefited from pandemic-driven margin expansion. The team uses hands-on research to navigate inflationary chaos, exiting underperforming positions and adding quality names like Univar Solutions at attractive prices. |
| Jul 1 2021 | 2021 Q2 | BDC, BR, CASS, CCMP, CLH, DAR, DY, MBUU, MGPI, MUSA, NGVT, SAFM, SCL, STAY, THO | Food, infrastructure, management, small cap, Supply Chain, Travel, value |
DY THO SAFM MGPI CCMP MBUU |
SouthernSun's small cap strategy underperformed in Q2 2021 as markets favored lockdown beneficiaries over reopening plays. The firm's core thesis centers on management quality evaluation, with portfolio leaders demonstrating resilience through pandemic challenges. Despite infrastructure uncertainty hurting some holdings, strong performance in food service recovery and spirits premiumization supported returns. New position additions reflect continued opportunity identification. |
| - | 2021 Q1 | AEGN, AGCO, BR, CASS, DAR, EGOV, FHN, FTDR, MIDD, NGVT, PII, SFD, STAY, THO, TMX | Automation, Financial Services, RVs, small cap, Specialty Chemicals, value |
THO PII CASS |
SouthernSun's small cap strategy gained 18.64% in Q1 2021, led by Thor Industries' record RV sales and Polaris' strong earnings growth. The manager sees exceptional opportunities in current environment with distorted values and negative real rates. They initiated Cass Information Systems and exited two positions. Market transitions between large/small and growth/value expected to favor their operationally excellent portfolio companies. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIManager draws parallels between today's AI-driven market concentration and the 2014-15 oil collapse, warning that AI has become a macroeconomic assumption embedded in capital expenditure plans and valuations. Physical constraints like energy intensity and grid limitations complicate AI scalability assumptions. |
Artificial Intelligence Data Centers Valuations Energy |
EnergyAI infrastructure's energy intensity creates significant constraints through rising electricity prices, grid capacity challenges, and regulatory scrutiny. These physical realities complicate the path forward for AI economics and challenge assumptions of frictionless scalability. |
Electricity Grid Data Centers Infrastructure | |
Small CapsPortfolio fundamentals remain strong with resilient cash flows and improved competitive positions, though markets continue to favor narrative momentum over breadth. The manager likes the current portfolio composition despite mixed absolute returns. |
Small Cap Fundamentals Value | |
| 2025 Q3 |
Small CapsSouthernSun focuses exclusively on small-cap securities defined as equity securities with market capitalizations within the range of the Russell 2000 Index. The manager emphasizes that divergence in small and mid-sized market segments creates opportunities for active discovery when new entrants come to the public stage. |
Russell 2000 Market Cap Discovery Divergence Active Management |
ValueThe firm's philosophy rests on valuation discipline as one of four enduring pillars, seeking valuations that provide a genuine margin of safety. They look for underappreciated strength early when patience still carries a premium and focus on companies that behave like private ones with disciplined capital allocation. |
Valuation Discipline Margin of Safety Undervalued Capital Allocation Private-like | |
QualitySouthernSun seeks companies with financial flexibility, management adaptability, and niche dominance. They favor businesses with strong balance sheets, minimal leverage, aligned management, transparent governance, and enduring competitive moats that can weather environments of ambiguity. |
Financial Flexibility Balance Sheets Competitive Moats Management Quality Niche Dominance | |
| 2025 Q2 |
TariffsTariffs have re-emerged as a significant cost driver, prompting companies to explore reshoring, leaner inventories, and domestic sourcing. Companies are developing mitigation plans including meaningful supply chain moves away from China. The impact varies significantly by company, with some facing material negative impacts while others may benefit from domestic sourcing advantages. |
Trade Policy Supply Chain China Reshoring Cost Inflation |
Capital DisciplineCash is king again with companies focusing on technology investment, R&D, share repurchase programs, steady dividends, and selective M&A. The volatility year to date has provided opportunities for several companies to more aggressively utilize existing and initiate new share repurchase programs. Management teams are articulating consistent approaches to capital allocation with commitment to shareholder return without abandoning long-term investment horizons. |
Buybacks Dividends Capital Markets Cash Management M&A | |
Operational DisciplineCompanies have moved from pandemic-era improvisation to methodical belt-tightening with laser focus on SG&A reduction, lean manufacturing, and strict pricing discipline. Margin preservation has become a guiding principle as companies defend profitability in a world where demand may not be as inelastic as once hoped. This includes reducing inventory levels to avoid being caught flat-footed by further demand slowing. |
Cost Management Margins Efficiency Inventory Management Pricing | |
HousingThe housing sector, especially residential new construction, continues to feel the bite of higher rates. However, several building products businesses are taking share from smaller competitors through innovation, new product introductions and expanded distribution. The sector faces ongoing challenges from elevated interest rates impacting demand. |
Construction Building Products Interest Rates Market Share Innovation | |
| 2025 Q1 |
Small CapsManager 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. The portfolio focuses on 20-30 fundamentally sound companies with financial backbone and market strongholds. |
Russell 2000 SMID Fundamentals Quality Valuation |
ValueThe manager sees a potential growth-to-value rotation that could spotlight small and mid caps, similar to post-2002. They believe the market is shedding excesses and revealing strength beneath, creating valuation opportunities for quiet performers. |
Rotation Undervalued Substance Quality Fundamentals | |
Trade PolicyTariff announcements and trade tensions, particularly with China, create near-term volatility and margin pressure. However, longer-term reshoring and domestic production trends could benefit portfolio companies with pricing power and operational flexibility. |
Tariffs China Reshoring Supply Chain Manufacturing | |
ResilienceThe manager emphasizes companies with financial backbone, cash reserves, and adaptable leadership that can endure through market storms. Historical performance through multiple bear markets demonstrates the portfolio's focus on durable businesses. |
Balance Sheet Cash Adaptability Endurance Cycles | |
| 2024 Q4 |
Auto AftermarketDorman Products represents a leading position in automotive aftermarket parts with unique first-to-aftermarket capabilities. The company has invested heavily in developing proprietary software to break down OE part codes and create matching functionality for complex electronic components. |
Aftermarket Automotive Electronics Innovation Software |
ApparelOxford Industries operates a portfolio of high-margin lifestyle brands including Tommy Bahama, Lilly Pulitzer, and Johnny Was. The company has demonstrated strong direct-to-consumer execution through brand-specific retail stores and omnichannel digital expertise with opportunities for continued organic growth. |
Brands Retail Direct-to-consumer Lifestyle Omnichannel | |
SemiconductorsAdvanced Energy Industries designs highly engineered power conversion solutions for semiconductor wafer fabrication equipment. The company maintains market leadership in process power and radio frequency power for conductor etch applications while diversifying into industrial, medical, and data center markets. |
Power conversion Wafer fabrication Etch Industrial Medical | |
| 2024 Q3 |
Infrastructure SpendingGlobal infrastructure market expected to grow at 7.2% CAGR from 2024-2030, driven by public and private sector investments in modernization and sustainability. Geopolitical shifts encouraging re-shoring, onshoring, and near-shoring require substantial infrastructure investment. Governments worldwide seek to bolster economic resilience through infrastructure spending. |
Infrastructure Modernization Sustainability Government Investment |
AIGlobal AI market projected to grow at 37%+ CAGR from 2024-2030, transforming industries from healthcare to manufacturing. Companies integrating AI for operational efficiency and strategic growth present significant opportunities. AI-driven innovations in agriculture include precision farming and automated monitoring systems. |
Artificial Intelligence Automation Innovation Efficiency Technology | |
OnshoringGeopolitical shifts highlighting supply chain fragility have encouraged governments to provide incentives for re-shoring, onshoring, and near-shoring of manufacturing. These developments require substantial infrastructure investment and create regulatory tailwinds for certain industries including energy, technology, healthcare, and agriculture. |
Manufacturing Supply Chain Domestic Resilience Policy | |
AgricultureConsistent demand for food production and supply chain optimization expected to maintain steady growth over the next decade. AI-driven innovations such as precision farming and automated monitoring systems help optimize resource usage, increase crop yields, and reduce waste. |
Food Farming Supply Chain Technology Sustainability | |
| 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 Telecommunications Federal Funding BEAD |
Energy TransitionDarling Ingredients is constructing sustainable aviation fuel 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. The company is a leading producer of renewable energy from food waste and edible by-products. |
Sustainable Aviation Fuel Renewable Energy Biofuels Food Waste SAF | |
HVACHVAC industry identified as having secular tailwinds and expected to benefit from long-term structural trends. The sector is positioned as one of the key focus areas offering significant growth opportunities in the current market environment. |
Climate Control Building Systems Infrastructure Construction Energy Efficiency | |
SemiconductorsSemiconductor industry identified as having secular tailwinds and expected to benefit from long-term structural trends. The sector is positioned as one of the key focus areas offering significant growth opportunities despite current market conditions. |
Chips Technology Electronics Manufacturing Innovation | |
| 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. Only 43% of US homes are passed with fiber, indicating a long runway for penetration. |
Fiber Infrastructure BEAD Broadband 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 focuses on increasing higher-margin proprietary brands mix and maintaining balance sheet flexibility without adding leverage. |
Specialty Retail Store Expansion Proprietary Brands Western Wear Work Apparel | |
Distilled SpiritsThe distilled spirits industry shows shift toward new distillate sales outpacing aged distillate for the first time since 2020. New distillate provides greater cash flow visibility and lower risk profile despite lower margins. Premium and ultra-premium branded spirits segment offers growth opportunities. |
Spirits Distilling Premium Brands Cash Flow Margin Expansion | |
| 2023 Q4 |
OnshoringCompanies continued 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 expected to aggressively evaluate and adjust their strategies to ensure competitive advantages. |
Supply Chain Manufacturing Security Geopolitics Trade |
Infrastructure SpendingDycom Industries benefits from favorable demand outlook for 2024 as government funding from the roughly $40 billion BEAD program is expected to start deployment. With only 43% of US homes passed with fiber, there remains a long runway for fiber penetration. |
Fiber Telecommunications Government BEAD Broadband | |
Small CapsSouthernSun manages a small cap strategy focused on niche-dominant, attractively-valued companies with financial flexibility and uniquely-fitted management teams. The strategy returned 13.93% gross for the trailing twelve months versus Russell 2000 at 16.93%. |
Russell 2000 Value Niche Management Financial Flexibility | |
| 2023 Q3 |
Energy TransitionDarling Ingredients is building Sustainable Aviation Fuel capacity expected online in Q4 2024, with further SAF expansion being evaluated as growth and incentives provide significant margin expansion and return on investment. The company is the largest publicly traded company turning edible by-products and food waste into sustainable products and a leading producer of renewable energy. |
Sustainable Aviation Fuel Renewable Energy Biofuels Energy Storage Carbon Capture |
Infrastructure SpendingDycom Industries benefits from unprecedented government funding through ARPA, RDOF, and BEAD programs driving very strong demand environment in 2024. With only 43% of U.S. homes passed with fiber, there is a long runway for fiber penetration, and Dycom is well-positioned to engineer and construct these fiber networks. |
Telecom Infrastructure Fiber Networks Government Funding Broadband Construction | |
Commercial Real EstateSmaller banks hold over 70% of commercial real estate loans worth $2 trillion, with $1.5 trillion set to be refinanced by 2025. Losses on bank balance sheets are at or near historic highs, creating significant refinancing pressure in the commercial real estate sector. |
Bank Lending Refinancing Real Estate Services Credit Stress Regional Banks | |
| 2023 Q2 |
Telecommunications InfrastructureDycom Industries benefits from strong demand for fiber infrastructure driven by exponential data consumption growth. High-speed fiber only passes 43% of US homes, with significant runway for expansion supported by government funding through ARPA, RDOF, and BEAD programs. |
Fiber Infrastructure Government Funding Data Consumption Rural Broadband |
Healthcare ServicesU.S. Physical Therapy demonstrates strong fundamentals with 16% revenue growth, improving employee turnover, and successful rate negotiations with private insurers offsetting Medicare reimbursement reductions. The company is well-positioned for acquisitions in this fragmented industry. |
Physical Therapy Healthcare Acquisitions Private Insurance Fragmented Industry | |
Specialty ChemicalsIngevity faces near-term headwinds from elevated crude tall oil prices due to increased biodiesel demand, but management is developing alternative raw material capabilities and opportunities to shift products into the biodiesel market. Automotive activated carbon products remain a tailwind. |
Crude Tall Oil Biodiesel Activated Carbon Raw Materials Automotive | |
Auto AftermarketDorman Products faces margin pressure from elevated freight and material costs, plus higher factoring expenses. However, freight costs are decreasing and management expects margin improvement as lower inventory costs flow through. Long-term demand trends remain attractive with increasing vehicle age and count. |
Aftermarket Parts Freight Costs Margin Pressure Vehicle Age SuperATV | |
Specialty RetailBoot Barn represents a compelling growth story with expansion potential from 356 to 900 stores over 7-10 years. The company dominates a fragmented western/work retail market with strong margins, brand loyalty, and growing exclusive brand penetration from 16% to 34% of sales. |
Western Retail Store Expansion Exclusive Brands Work Apparel Market Dominance | |
| 2023 Q1 |
Small CapsManager focuses exclusively on small cap securities within the Russell 2000 range, emphasizing niche-dominant companies with strong balance sheets and owner-oriented management. Portfolio typically holds 20-30 concentrated positions in small cap businesses. |
Small Cap Russell 2000 Niche Dominant Concentrated |
ValueManager seeks attractively-valued companies that are overlooked or underappreciated, remaining price conscious as current valuations don't reflect negative external influences. Focus on finding hidden gems with strong fundamentals trading below intrinsic value. |
Value Undervalued Hidden Gems Price Conscious | |
QualityEmphasis on companies with strong balance sheets, fundamental operational execution, focused and accountable management teams, and distinct competitive advantages through innovation and technology implementation. |
Quality Strong Balance Sheets Competitive Advantages Management | |
| 2022 Q4 |
Small CapsManager believes the environment could not be better for their disciplined approach as large cap has worked but it might be small cap's turn. They see a potential multi-year shift where small caps outperform after a decade of large cap dominance. |
Small Caps Value Active |
ValueManager suggests growth has worked but it might be value's turn, indicating a potential multi-year shift in market leadership. They position themselves as beneficiaries of this rotation from growth to value investing. |
Value Growth Rotation | |
Industrial MachineryEnerpac Tool Group was a top contributor with strong results including 13% sales growth and expanding EBITDA margins. The company's ASCEND transformation program is delivering benefits and management has set ambitious long-term targets. |
Industrial Machinery Transformation | |
Specialty ChemicalsUnivar Solutions was a top performer with 25% sales growth and 28% EBITDA growth driven by solid execution. Management has transformed the business, integrated acquisitions, and reduced cyclical exposure while focusing on resilient markets like food and life sciences. |
Chemicals Distribution Transformation | |
Community BanksInitiated new position in Live Oak Bancshares, the largest SBA lender with a unique branchless model and strong fintech investments. The bank has exceptional credit history and is well-capitalized to weather potential economic downturns. |
Banking SBA FinTech | |
| 2022 Q3 |
EnergyMurphy USA benefited from higher fuel margins due to cost pressures on independent retailers. Darling Ingredients delivered record results in renewable energy and sustainable fuel segments, with recent legislation supporting renewable diesel and sustainable aviation fuel markets. |
Fuel Renewable Margins Legislation Aviation |
Supply ChainSupply chain disruption is a key macro concern affecting portfolio companies. Dorman Products faced supply chain constraints and inflationary pressures requiring price increases. The manager queries companies on manufacturing, distribution, and technological adoption levels. |
Disruption Constraints Manufacturing Distribution Technology | |
InflationInflationary pressures are impacting portfolio companies, with Dorman Products specifically lowering guidance due to difficulty passing through price increases. Rising interest rates affect business viability and competitiveness across time horizons. |
Pressures Pricing Rates Costs Guidance | |
BuybacksMurphy USA management has repurchased over 50% of shares since 2013 spin-off, focusing capital allocation on share buybacks with excess cash flow. Brink's has been more aggressively buying back shares given recent stock price weakness. |
Repurchases Capital Allocation Excess Weakness | |
| 2022 Q2 |
InflationManager notes persistent inflation was a key market focus early in Q2, driving investment flows into inflation-sensitive areas. However, sentiment shifted to recession fears by quarter-end, reversing the inflation trade. They believe current inflation challenges are wide-ranging and more nuanced than basic supply-demand imbalances. |
Inflation Monetary Policy Fed Supply Chain Commodities |
Small CapsThe fund focuses exclusively on small cap securities within the Russell 2000 range. They believe their approach of focusing on niche businesses with exceptional balance sheets and seasoned leadership can produce good results in the current volatile environment. Portfolio typically holds 20-30 securities. |
Small Cap Russell 2000 Niche Businesses Balance Sheets Concentration | |
ValueManager emphasizes seeking businesses with reliable mid-single digit organic growth prospects, well-funded R&D, and targeted M&A opportunities. They note multiples have come down but don't always translate to undervalue, suggesting valuations remain too high in much of the marketplace. |
Valuation Multiples Organic Growth M&A Undervalue | |
QualityStrong emphasis on businesses with exceptional balance sheets, ample liquidity, and experienced management teams. Many portfolio companies demonstrated operational efficiencies during previous challenging periods (2014-16 industrial recession, 2018 trade war) and are now showing benefits of those improvements. |
Balance Sheets Liquidity Management Operational Efficiency Quality | |
| 2022 Q1 |
Ag EquipmentAGCO Corp reached record sales of $11.1 billion with strong demand across all regions, particularly South America with 50%+ growth. The company is well positioned to meet high global demand for agricultural equipment through their Farmer-First strategy centered on Precision Ag, despite supply chain challenges. |
AGCO Agricultural Equipment Precision Global |
BiofuelsDarling Ingredients delivered record EBITDA of $1.235 billion with their Diamond Green Diesel joint venture selling 370 million gallons of renewable diesel. The company expanded capacity to 750 million gallons and acquired Valley Proteins for additional low carbon feedstock. |
Renewable Diesel EBITDA Capacity Feedstock | |
TravelThor Industries generated record results after a record fiscal 2021 with over 300,000 RV units sold. Management believes demand for the RV lifestyle will remain long into the future, supported by Thor's leading market position and financial flexibility to navigate economic downturns. |
RVs Lifestyle Recreation Demand Flexibility | |
Specialty ChemicalsStepan Co faced supply chain disruptions and lower surfactant volumes but offset raw material cost increases with pricing. The company is investing $350-375 million in 2022 to increase capacity for sulfates, amphoterics and alkoxylates, including a new facility in Texas. |
Surfactants Pricing Capacity Investment Texas | |
| 2021 Q4 |
SemiconductorsCMC Materials was the leading contributor after announcing a merger with Entegris for $6.5 billion, representing a 35% premium. The deal highlights the value in semiconductor supply chain companies and consolidation opportunities in this critical industry. |
Semiconductor Equipment Materials Manufacturing Consolidation Supply Chain |
Infrastructure SpendingDycom Industries benefits from strong broadband infrastructure demand and the recently enacted Infrastructure Investment and Jobs Act, which includes over $40 billion for rural communications networks construction. The company maintains a $5.9 billion backlog. |
Broadband Fiber Networks Government Spending Rural Infrastructure Communications | |
BuybacksThor Industries authorized a $250 million share repurchase program which management will utilize opportunistically while maintaining their conservative balance sheet approach. This reflects confidence in the business despite recent stock price weakness. |
Share Repurchase Capital Allocation Management Confidence Balance Sheet | |
| 2021 Q3 |
InflationManager discusses widespread inflation concerns driven by supply chain disruptions, labor shortages, and policy decisions. Notes the shift from transitory to longer transition consensus and expects continued inflationary pressures affecting input costs and transportation. |
Supply Chain Labor Policy Commodities Transportation |
Supply ChainExtensive discussion of supply chain congestion and disruptions affecting portfolio companies. Manager views these as temporary but acknowledges significant ongoing impacts on operations and costs across the portfolio. |
Logistics Bottlenecks Transportation Ports Manufacturing | |
LaborManager highlights workforce challenges across virtually all portfolio companies, including permanent exits from the labor force and COVID-related concerns. Views labor shortages as a key constraint on business operations. |
Workforce Employment Shortages COVID Demographics | |
| 2021 Q2 |
ManagementSouthernSun emphasizes their ability to evaluate leadership quality as a key element of their investment process. They assess management teams on adaptability, accountability, and execution-oriented qualities. The firm believes their portfolio management teams have performed well under extreme conditions over the past 15-17 months, which adds confidence to their investment process. |
Leadership Execution Adaptability Accountability |
Infrastructure SpendingEarly optimism about an infrastructure package gave way to doubts about scope, timing and likelihood. This uncertainty negatively impacted Dycom Industries, which operates in the infrastructure space with extensive backlog for fiber deployment and bandwidth requirements. |
Infrastructure Fiber Bandwidth Government | |
Supply ChainThe firm highlights ongoing labor force and supply chain challenges that remain unbalanced despite some adjustments. These issues have affected portfolio companies including THOR Industries, which faced supply chain constraints that could hinder near-term production levels. |
Labor Production Constraints Logistics | |
TravelThe RV industry continues to see strong consumer demand with proliferation of younger, more diverse buyers entering the market - a trend accelerated by the pandemic. THOR Industries set sales records with strong demand, low dealer inventory, and rapidly growing backlog of orders. |
RV Recreation Demographics Pandemic | |
FoodSanderson Farms benefited from rising demand for chicken products and higher chicken prices, driven by increased demand from food service customers as consumers returned to restaurants and quick serve chains featured chicken sandwiches. |
Poultry Restaurants Foodservice Pricing | |
| 2021 Q1 |
Small CapsThe manager expects market transitions between large versus small, growth versus value versus momentum to favor their small cap portfolio businesses. When management teams distinguish themselves through excellence in execution, equity sponsorship has historically become more reflective of fundamental long-term value during these transitional periods. |
Small Cap Value Execution Transitions |
ValueThe manager is finding as many interesting and diverse opportunities as at any time in their history due to an environment with distorted values, negative real interest rates, and clever financial engineering. They focus on niche-dominant, attractively-valued companies with financial flexibility. |
Value Opportunities Distorted Values Niche-Dominant | |
TravelThor Industries continues to set sales records due to strong consumer demand for RVs, with the RV industry positioned to deliver strong shipment growth for the foreseeable future. The company acquired luxury RV manufacturer Tiffin Group at an attractive valuation, extending its track record of value-creating acquisitions. |
RVs Consumer Demand Travel Recreation |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Feb 25, 2026 | Fund Letters | Michael Cook | AEIS | Advanced Energy Industries, Inc. | Information Technology | Semiconductors & Semiconductor Equipment | Bull | NASDAQ | AI, CapEx, data centers, net cash, operating leverage, semiconductors | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | DAR | Darling Ingredients Inc. | Consumer Staples | Food Products | Bull | New York Stock Exchange | cash flow, Cyclical Recovery, Regulation, Renewable diesel, Sustainability, vertical integration | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | CSW | CSW Industrials, Inc. | Industrials | Building Products | Bull | NASDAQ | Acquisitions, compounder, Distribution, HVAC, leverage, Pricing power | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | KAI | Kadant Inc. | Industrials | Industrial Machinery | Bull | New York Stock Exchange | Acquisitions, Bolt-On, Free Cash Flow, Industrials, Pricing power, recurring revenue | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | DORM | Dorman Products, Inc. | Consumer Discretionary | Automotive Parts & Equipment | Bull | NASDAQ | aftermarket, Execution, Margins, Mix, Pricing, Vehicle Fleet | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | DY | Dycom Industries, Inc. | Industrials | Construction & Engineering | Bear | New York Stock Exchange | Acquisitions, capital allocation, Fiber, Integration, Telecom, valuation | Login |
| Feb 25, 2026 | Fund Letters | Michael Cook | TKR | Timken Company | Industrials | Industrial Machinery | Bear | New York Stock Exchange | Acquisitions, Bearings, Execution, Governance, Industrial Motion, ROIC | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | BCO | Brink’s Company | Industrials | Security & Protection Services | Bull | NYSE | — | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | MOD | Modine Manufacturing Co. | Consumer Discretionary | Building Products & Equipment | Bull | NYSE | AI, capacity expansion, capital discipline, Cooling, datacenter, EBITDA | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | DAR | Darling Ingredients Inc. | Consumer Staples | Renewable Fuels & Specialty Chemicals | Bear | NYSE | Feedstock, Food waste, Free Cash Flow, Margin recovery, Regulation, Renewable fuels | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | SCL | Stepan Company | Materials | Specialty Chemicals | Bull | NYSE | capacity expansion, deleveraging, EBITDA, Polymers, specialty chemicals, Surfactants | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | CXT | Crane NXT Co. | Industrials | Security & Authentication Technologies | Bull | NYSE | Authentication, Digital security, M&A, Payments, recurring revenue, spin-off | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | BCO | Brink’s Company | Industrials | Security & Protection Services | Bull | NYSE | — | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | MOD | Modine Manufacturing Co. | Consumer Discretionary | Building Products & Equipment | Bull | NYSE | AI, capacity expansion, capital discipline, Cooling, datacenter, EBITDA | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | DAR | Darling Ingredients Inc. | Consumer Staples | Renewable Fuels & Specialty Chemicals | Bear | NYSE | Feedstock, Food waste, Free Cash Flow, Margin recovery, Regulation, Renewable fuels | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | SCL | Stepan Company | Materials | Specialty Chemicals | Bull | NYSE | capacity expansion, deleveraging, EBITDA, Polymers, specialty chemicals, Surfactants | Login |
| Oct 30, 2025 | Fund Letters | Michael Cook | CXT | Crane NXT Co. | Industrials | Security & Authentication Technologies | Bull | NYSE | Authentication, Digital security, M&A, Payments, recurring revenue, spin-off | Login |
| Jul 17, 2025 | Fund Letters | Michael Cook | BOOT | Boot Barn Holdings, Inc. | Consumer Discretionary | Specialty Stores | Bull | New York Stock Exchange | Balancesheet, consumer, expansion, Margins, retail, Samestoresales, specialty | Login |
| Jul 17, 2025 | Fund Letters | Michael Cook | DY | Dycom Industries, Inc. | Industrials | Construction & Engineering | Bull | New York Stock Exchange | Acquisitions, backlog, Fiber, growth, infrastructure, leverage, Telecom | Login |
| Jul 17, 2025 | Fund Letters | Michael Cook | SAM | The Boston Beer Company, Inc. | Consumer Staples | Brewers | Bull | New York Stock Exchange | Beverages, brands, cashflow, innovation, Longterm, Margins, Staples | Login |
| Jul 17, 2025 | Fund Letters | Michael Cook | MSA | MSA Safety, Inc. | Industrials | Safety Equipment | Bull | New York Stock Exchange | Balancesheet, Equipment, Industrials, Margins, Recurringrevenue, Safety, valuation | Login |
| Jun 30, 2025 | Fund Letters | SouthernSun Small Cap | BOOT | Boot Barn Holdings, Inc. | Consumer Discretionary | Specialty Retail | Bull | NYSE | Consumer Discretionary, Proprietary Brands, same-store sales, Specialty retail, store expansion, supply chain, Tariff mitigation, Western Apparel | Login |
| Jun 30, 2025 | Fund Letters | SouthernSun Small Cap | DY | Dycom Industries, Inc. | Industrials | Construction & Engineering | Bull | NYSE | Acquisitions, AI data centers, backlog, Broadband Programs, Construction services, EBITDA growth, Fiber networks, telecommunications infrastructure | Login |
| Jun 30, 2025 | Fund Letters | SouthernSun Small Cap | OXM | Oxford Industries, Inc. | Consumer Discretionary | Textiles, Apparel & Luxury Goods | Bear | NYSE | Apparel, China exposure, Consumer Discretionary, Distribution Investment, margin pressure, Seasonal Clothing, supply chain, tariffs | Login |
| Jun 30, 2025 | Fund Letters | SouthernSun Small Cap | SAM | The Boston Beer Company, Inc. | Consumer Staples | Beverages | Bull | NASDAQ | Beverages, Beyond Beer, brand portfolio, gross margins, Hard Seltzer, Innovation Pipeline, operational efficiency, Twisted Tea | Login |
| Jun 30, 2025 | Fund Letters | SouthernSun Small Cap | MSA | MSA Safety, Inc. | Industrials | Industrial Machinery | Bull | NYSE | Connected Technology, Fall Protection, Firefighter Equipment, Gas Detection, M&A Opportunities, recurring revenue, Safety Equipment, SCBA | Login |
| Apr 30, 2025 | Fund Letters | SouthernSun Small Cap | EPAC | Enerpac Tool Group Corporation | Industrials | Industrial Machinery | Bull | NYSE | high-margin, Hydraulic Equipment, industrial tools, infrastructure, M&A, organic growth, Share Buybacks | Login |
| Apr 30, 2025 | Fund Letters | SouthernSun Small Cap | TKR | The Timken Company | Industrials | Industrial Machinery | Bull | NYSE | attractive valuation, Cost Reduction, Engineered Bearings, financial flexibility, Industrial Motion, Market Leading, Wind Turbine | Login |
| Apr 30, 2025 | Fund Letters | SouthernSun Small Cap | BOOT | Boot Barn Holdings, Inc. | Consumer Discretionary | Specialty Retail | Bull | NYSE | clean balance sheet, Margin Improvement, Pricing power, Specialty retail, store expansion, tariff impact, Western Wear | Login |
| Apr 30, 2025 | Fund Letters | SouthernSun Small Cap | LOB | Live Oak Bancshares, Inc. | Financials | Regional Banks | Bull | NASDAQ | Credit cycle, Differentiated Model, floating rate, loan originations, provision expense, Small Business Lending, technology platform | Login |
| Apr 30, 2025 | Fund Letters | SouthernSun Small Cap | EXTR | Extreme Networks, Inc. | Information Technology | Communications Equipment | Bull | NASDAQ | cloud services, Distributed Networks, IoT, Managed Service Providers, networking equipment, recurring revenue, WiFi 6E, WiFi 7 | Login |
| Apr 30, 2025 | Fund Letters | SouthernSun Small Cap | MOD | Modine Manufacturing Company | Industrials | Industrial Machinery | Bull | NYSE | data center cooling, Electric Vehicles, Heat Exchangers, HVAC, operational excellence, thermal management, turnaround | Login |
| Sep 30, 2024 | Fund Letters | SouthernSun Small Cap | LPX | Louisiana-Pacific Corporation | Materials | Forest Products | Bull | NYSE | Building materials, construction, Engineered Wood, Housing, manufacturing, market share gains, OSB, Siding | Login |
| Sep 30, 2024 | Fund Letters | SouthernSun Small Cap | BOOT | Boot Barn Holdings, Inc. | Consumer Discretionary | Specialty Retail | Bull | NYSE | debt-free, Geographic Growth, Omnichannel, same-store sales, Specialty retail, store expansion, Western Wear, Work Apparel | Login |
| Sep 30, 2024 | Fund Letters | SouthernSun Small Cap | USPH | U.S. Physical Therapy, Inc. | Health Care | Health Care Services | Bull | NYSE | Acquisitions, Commercial Payers, Fragmented Industry, Healthcare services, Industrial Injury Prevention, Labor Costs, Medicare Reimbursement, Physical Therapy | Login |
| Sep 30, 2024 | Fund Letters | SouthernSun Small Cap | NGVT | Ingevity Corporation | Materials | Specialty Chemicals | Neutral | NYSE | Activated-carbon, Automotive Emissions, Cost Reduction, industrial applications, Management Change, Performance Materials, restructuring, specialty chemicals | Login |
| Jun 30, 2024 | Fund Letters | SouthernSun Small Cap | BOOT | Boot Barn Holdings, Inc | Consumer Discretionary | Specialty Retail | Bull | NYSE | conservative leverage, growth, Internally Generated Cash Flow, same-store sales, Specialty retail, store expansion, Western Wear | Login |
| Jun 30, 2024 | Fund Letters | SouthernSun Small Cap | DY | Dycom Industries, Inc | Industrials | Construction & Engineering | Bull | NYSE | BEAD Program, CEO Succession, Fiber Construction, government funding, M&A, margin expansion, organic growth, telecommunications infrastructure | Login |
| Jun 30, 2024 | Fund Letters | SouthernSun Small Cap | DAR | Darling Ingredients Inc | Materials | Chemicals | Bull | NYSE | Brazil Operations, industry consolidation, renewable energy, Sustainable aviation fuel, sustainable products, Transition Year, vertical integration, Waste-to-Energy | Login |
| Jun 30, 2024 | Fund Letters | SouthernSun Small 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, National Operator, Physical Therapy | Login |
| Mar 31, 2024 | Fund Letters | SouthernSun Small Cap | DY | Dycom Industries, Inc. | Industrials | Construction & Engineering | Bull | NYSE | Construction services, engineering, Fiber Infrastructure, Government Programs, growth, private equity, telecommunications, utilities | Login |
| Mar 31, 2024 | Fund Letters | SouthernSun Small Cap | BOOT | Boot Barn Holdings, Inc. | Consumer Discretionary | Specialty Retail | Bull | NYSE | e-commerce, growth, margin expansion, Proprietary Brands, Specialty retail, store expansion, Western Apparel | Login |
| Mar 31, 2024 | Fund Letters | SouthernSun Small Cap | MBUU | Malibu Boats, Inc. | Consumer Discretionary | Leisure Products | Neutral | NASDAQ | Cyclical, Dealer Relations, Industry Downturn, inventory reduction, leadership transition, net cash, recreational boats | Login |
| Mar 31, 2024 | Fund Letters | SouthernSun Small Cap | MGPI | MGP Ingredients Inc. | Consumer Staples | Food Products | Bull | NASDAQ | Branded Spirits, capacity expansion, Cash Flow Visibility, Contract Sales, Distilled Spirits, Food Ingredients, premium products, Protein Products | Login |
| Jun 30, 2023 | Fund Letters | SouthernSun Small Cap | DY | Dycom Industries, Inc. | Engineering & Construction | Construction & Engineering | Bull | New York Stock Exchange | Capacity constraints, Construction services, EBITDA Expansion, Fiber Optic, government funding, Rural Broadband, telecommunications infrastructure | Login |
| Jun 30, 2023 | Fund Letters | SouthernSun Small Cap | USPH | U.S. Physical Therapy, Inc. | Medical Care Facilities | Health Care Providers & Services | Bull | New York Stock Exchange | Acquisitions, Fragmented Industry, Healthcare services, Industrial Injury Prevention, Outpatient Clinics, Physical Therapy, Private Insurance | Login |
| Jun 30, 2023 | Fund Letters | SouthernSun Small Cap | NGVT | Ingevity Corporation | Specialty Chemicals | Specialty Chemicals | Bull | New York Stock Exchange | Activated-carbon, Automotive Emissions, Biodiesel, financial flexibility, production capacity, raw material costs, specialty chemicals | Login |
| Jun 30, 2023 | Fund Letters | SouthernSun Small Cap | DORM | Dorman Products, Inc. | Auto Parts | Automotive Retail | Bull | NASDAQ | Automotive Aftermarket, Freight Costs, Heavy-Duty, Replacement Parts, Research development, SuperATV Acquisition, Vehicle Parc | Login |
| Jun 30, 2023 | Fund Letters | SouthernSun Small Cap | BOOT | Boot Barn Holdings, Inc. | Apparel Retail | Specialty Retail | Bull | New York Stock Exchange | Exclusive Brands, Omni Channel, Rural Markets, Specialty retail, store expansion, Western Retail, Work Apparel | Login |
| Mar 31, 2023 | Fund Letters | SouthernSun Small Cap | BCO | The Brink's Company | Security & Protection Services | Security & Alarm Services | Bull | New York Stock Exchange | ATM Services, Cash management, digital payments, global expansion, operating leverage, organic growth, security services | Login |
| Mar 31, 2023 | Fund Letters | SouthernSun Small Cap | TKR | The Timken Company | Tools & Accessories | Industrial Machinery | Bull | New York Stock Exchange | Free Cash Flow, Industrial Bearings, Niche Dominant, Owner-Oriented Management, Quality Improvement, renewable energy, valuation disconnect | Login |
| Mar 31, 2023 | Fund Letters | SouthernSun Small Cap | LOB | Live Oak Bancshares | Banks - Regional | Regional Banks | Bull | NASDAQ | Branchless Banking, credit quality, Deposit Stability, Fintech Investments, Niche Banking, SBA lending, small business | Login |
| Mar 31, 2023 | Fund Letters | SouthernSun Small Cap | DAR | Darling Ingredients | Packaged Foods | Agricultural Products | Bull | New York Stock Exchange | Animal Processing, Decarbonization, Renewable diesel, renewable energy, strategic acquisitions, Sustainable aviation fuel, vertical integration | Login |
| Dec 31, 2023 | Fund Letters | SouthernSun Small Cap | ARGX BB|DAVA|DDOG|GLOB|ILMN|LOAR|MELI|NET|NU|NVDA|TSM | Live Oak Bancshares, Inc. | Financials | Regional Banks | Bull | NASDAQ | Branchless Model, credit quality, Equity, interest rate sensitivity, regional bank, SBA lending, small business, Technology-Enabled Banking | Login |
| Dec 31, 2023 | Fund Letters | SouthernSun Small Cap | ABDY.L | Dycom Industries, Inc. | Industrials | Construction & Engineering | Bull | NYSE | BEAD Program, Construction services, Equity, Fiber Infrastructure, government funding, margin expansion, telecommunications | Login |
| Dec 31, 2023 | Fund Letters | SouthernSun Small Cap | BBDC4.SA | Belden Inc. | Information Technology | Electronic Equipment, Instruments & Components | Bull | NYSE | 5G infrastructure, automotive, cloud services, Destocking, Equity, Industrial automation, networking solutions, Specialty Technology | Login |
| Dec 31, 2023 | Fund Letters | SouthernSun Small Cap | SAM | Boston Beer Company, Inc. | Consumer Staples | Brewers | Bull | NYSE | alcoholic beverages, brand portfolio, consumer staples, Equity, margin expansion, operational efficiency, share repurchases, Twisted Tea | Login |
| Dec 31, 2022 | Fund Letters | SouthernSun Small Cap | EPAC | Enerpac Tool Group Corp | Specialty Industrial Machinery | Industrial Machinery | Bull | New York Stock Exchange | ASCEND Program, CEO transition, global leader, Hydraulic Tools, Industrial Equipment, margin expansion, Specialized Manufacturing, transformation program | Login |
| Dec 31, 2022 | Fund Letters | SouthernSun Small Cap | UNVR | Univar Solutions | Other | Specialty Chemicals | Bull | New York Stock Exchange | business transformation, chemical distribution, Defensive Markets, Dividend initiation, Food & Life Sciences, M&A Target, NEXEO Integration, share repurchases | Login |
| Dec 31, 2022 | Fund Letters | SouthernSun Small Cap | AWI | Armstrong World Industries, Inc. | Building Products & Equipment | Building Products | Bull | New York Stock Exchange | attractive valuation, Building Products, Ceiling Systems, Commercial Construction, Diversified End Markets, market leader, Pent-up Demand, Supply Chain Headwinds | Login |
| Dec 31, 2022 | Fund Letters | SouthernSun Small Cap | DAR | Darling Ingredients | Packaged Foods | Food Products | Bull | New York Stock Exchange | acquisition strategy, Collagen Peptides, deleveraging, global expansion, Low Carbon Feedstock, Rendering, renewable energy, Sustainable Ingredients | Login |
| Dec 31, 2022 | Fund Letters | SouthernSun Small Cap | LOB | Live Oak Bancshares, Inc. | Banks - Regional | Regional Banks | Bull | NASDAQ | Branchless Banking, Fintech Ventures, founder-led, Government Guaranteed, SBA lending, small business, technology platform, Venture Capital | Login |
| Sep 30, 2022 | Fund Letters | SouthernSun Small Cap | MUSA | Murphy USA, Inc. | Specialty Retail | Specialty Retail | Bull | New York Stock Exchange | cash flow generation, Convenience Store, Fuel Retailer, Low-Cost Operator, Share Buybacks, Specialty retail, Walmart partnership | Login |
| Sep 30, 2022 | Fund Letters | SouthernSun Small Cap | DAR | Darling Ingredients Inc. | Packaged Foods | Chemicals | Bull | New York Stock Exchange | Circular economy, Collagen Peptides, ESG, M&A growth, Rendering, Renewable diesel, renewable energy, Sustainable Ingredients | Login |
| Sep 30, 2022 | Fund Letters | SouthernSun Small Cap | DORM | Dorman Products, Inc. | Auto Parts | Distributors | Bull | NASDAQ | Automotive Aftermarket, Defensive Industry, M&A Diversification, Powersports, product innovation, Replacement Parts, supply chain | Login |
| Sep 30, 2022 | Fund Letters | SouthernSun Small Cap | BCO | The Brink's Company | Security & Protection Services | Commercial Services & Supplies | Bull | New York Stock Exchange | ATM Services, Cash management, M&A growth, margin expansion, new management, Outsourcing, Secure Logistics, Share Buybacks | Login |
| Jun 30, 2022 | Fund Letters | SouthernSun Small Cap | MGPI | MGP Ingredients Inc. | Beverages - Wineries & Distilleries | Distillers & Vintners | Bull | NASDAQ | American Whiskey, Branded Spirits, Brown Goods, capacity expansion, consumer staples, Distilled Spirits, Food Ingredients, margin expansion | Login |
| Jun 30, 2022 | Fund Letters | SouthernSun Small Cap | DORM | Dorman Products, Inc. | Auto Parts | Automotive Retail | Bull | NASDAQ | acquisition integration, Automotive Aftermarket, capital allocation, countercyclical, low leverage, Pricing power, Replacement Parts | Login |
| Jun 30, 2022 | Fund Letters | SouthernSun Small Cap | DAR | Darling Ingredients Inc. | Packaged Foods | Agricultural Products | Bull | New York Stock Exchange | Acquisitions, Green Energy, market leader, Protein Demand, Rendering, Renewable diesel, renewable energy, Sustainable Ingredients | Login |
| Jun 30, 2022 | Fund Letters | SouthernSun Small Cap | AGCO | AGCO Corporation | Farm & Heavy Construction Machinery | Agricultural & Farm Machinery | Bull | New York Stock Exchange | aftermarket services, Agricultural Equipment, Fendt, Global Manufacturing, Precision Agriculture, Pricing power, Sustainable Technology | Login |
| Jun 30, 2022 | Fund Letters | SouthernSun Small Cap | SAM | The Boston Beer Company, Inc. | Beverages - Brewers | Brewers | Bull | New York Stock Exchange | Beyond Beer, craft beer, debt-free, founder-led, Hard Seltzer, innovation culture, market share, Truly, Twisted Tea | Login |
| Apr 1, 2022 | Fund Letters | SouthernSun Small Cap | AGCO | AGCO Corp. | Farm & Heavy Construction Machinery | Agricultural & Farm Machinery | Bull | New York Stock Exchange | Agricultural Equipment, Argentina, Brazil, Equity, Farm Equipment, Global Manufacturer, Precision Agriculture, South America, Sustainable AgTech | Login |
| Apr 1, 2022 | Fund Letters | SouthernSun Small Cap | DAR | Darling Ingredients, Inc. | Packaged Foods | Packaged Foods & Meats | Bull | New York Stock Exchange | EBITDA growth, Equity, Feed Ingredients, Food Ingredients, Joint venture, Low Carbon Feedstock, Renewable diesel, renewable energy, Sustainable Ingredients, Valero | Login |
| Apr 1, 2022 | Fund Letters | SouthernSun Small Cap | THO | Thor Industries, Inc. | Recreational Vehicles | Leisure Products | Bull | New York Stock Exchange | Airstream, conservative balance sheet, economic downturn, Equity, market leader, Recreational Vehicles, RV Lifestyle, RV Manufacturer, share repurchase | Login |
| Apr 1, 2022 | Fund Letters | SouthernSun Small Cap | SCL | Stepan Co. | Specialty Chemicals | Specialty Chemicals | Bull | New York Stock Exchange | Alkoxylation, capacity expansion, capital deployment, Equity, INVISTA Acquisition, Pasadena Facility, Polymers, Returns on Capital, specialty chemicals, Surfactants | Login |
| Apr 1, 2022 | Fund Letters | SouthernSun Small Cap | COOK | Traeger, Inc. | Furnishings, Fixtures & Appliances | Leisure Products | Bull | New York Stock Exchange | Accessories, Category Leader, Consumables, Equity, Grilling App, innovation, IoT Devices, Management alignment, market share, recurring revenue, Wood Pellet Grills | Login |
| Dec 31, 2021 | Fund Letters | SouthernSun Small Cap | CCMP | CMC Materials, Inc. | Other | Specialty Chemicals | Bull | NASDAQ | M&A, manufacturing, materials, Niche Dominant, Semiconductor, specialty chemicals, technology | Login |
| Dec 31, 2021 | Fund Letters | SouthernSun Small Cap | DY | Dycom Industries, Inc. | Engineering & Construction | Construction & Engineering | Bull | New York Stock Exchange | broadband, construction, Fiber networks, Government Spending, infrastructure, Rural Communications, telecommunications | Login |
| Dec 31, 2021 | Fund Letters | SouthernSun Small Cap | THO | Thor Industries, Inc. | Recreational Vehicles | Leisure Products | Bull | New York Stock Exchange | backlog, Consumer Discretionary, Leisure, manufacturing, Recreational Vehicles, RV, share repurchase | Login |
| Dec 31, 2021 | Fund Letters | SouthernSun Small Cap | PII | Polaris, Inc. | Recreational Vehicles | Leisure Products | Bull | New York Stock Exchange | ATVs, Electric Vehicles, innovation, Power Sports, Recreational Vehicles, Snowmobiles, supply chain | Login |
| Sep 30, 2021 | Fund Letters | SouthernSun Small Cap | HRC | Hill-Rom Holdings, Inc. | Other | Health Care Equipment | Bull | New York Stock Exchange | acquisition target, Connected care, Healthcare Equipment, medical technology, premium valuation, product innovation, strategic value | Login |
| Sep 30, 2021 | Fund Letters | SouthernSun Small Cap | MUSA | Murphy USA, Inc. | Specialty Retail | Gas Stations & Convenience Stores | Bull | New York Stock Exchange | Competitive Advantage, convenience stores, Fuel Retail, High Volume, Low-Cost Model, margin expansion, share repurchases | Login |
| Sep 30, 2021 | Fund Letters | SouthernSun Small Cap | BCO | The Brink's Co. | Security & Protection Services | Security & Alarm Services | Bull | New York Stock Exchange | Cash management, Cost Reduction, Digital Solutions, economic recovery, global leader, Operational Leverage, security services | Login |
| Sep 30, 2021 | Fund Letters | SouthernSun Small Cap | TKR | Timken Co. | Tools & Accessories | Industrial Machinery | Bull | New York Stock Exchange | Bearings, financial flexibility, industrial machinery, Power Transmission, renewable energy, Solar Energy, Wind Energy | Login |
| Sep 30, 2021 | Fund Letters | SouthernSun Small Cap | FTDR | Frontdoor, Inc. | Personal Services | Diversified Support Services | Bear | NASDAQ | capital allocation, Home Services, Management Concerns, Position exit, strategic focus, technology integration | Login |
| Sep 30, 2021 | Fund Letters | SouthernSun Small Cap | UNVR | Univar Solutions, Inc. | Other | Commodity Chemicals | Bull | New York Stock Exchange | chemical distribution, Industrial Markets, Leverage reduction, margin expansion, Operational Improvement, Price Inflation, synergies | Login |
| Jul 1, 2021 | Fund Letters | SouthernSun Small Cap | DY | Dycom Industries, Inc. | Engineering & Construction | Construction & Engineering | Bull | New York Stock Exchange | backlog, Bandwidth, cash flow generation, Fiber Deployment, infrastructure, Specialty Contracting, telecommunications infrastructure | Login |
| Jul 1, 2021 | Fund Letters | SouthernSun Small Cap | THO | THOR Industries, Inc. | Recreational Vehicles | Leisure Products | Bull | New York Stock Exchange | backlog, consumer demand, Demographic Shift, market leader, Pandemic Beneficiary, RV Manufacturing, supply chain | Login |
| Jul 1, 2021 | Fund Letters | SouthernSun Small Cap | SAFM | Sanderson Farms, Inc. | Other | Food Products | Bull | NASDAQ | Chicken Pricing, Foodservice Recovery, Low-cost producer, M&A Target, market share gains, Poultry Producer, QSR | Login |
| Jul 1, 2021 | Fund Letters | SouthernSun Small Cap | MGPI | MGP Ingredients, Inc. | Beverages - Wineries & Distilleries | Food Products | Bull | NASDAQ | American Whiskey, Branded Spirits, Distilled Spirits, Luxco Acquisition, margin expansion, Plant-Based Proteins, premium spirits, premiumization | Login |
| Jul 1, 2021 | Fund Letters | SouthernSun Small Cap | CCMP | CMC Materials, Inc. | Other | Chemicals | Bull | NASDAQ | Critical Consumables, Digitization, Manufacturing Yields, Niche Dominant, Pipeline Chemicals, semiconductor materials, Technology Advancement | Login |
| Jul 1, 2021 | Fund Letters | SouthernSun Small Cap | MBUU | Malibu Boats, Inc. | Recreational Vehicles | Leisure Products | Bull | NASDAQ | acquisition strategy, brand portfolio, margin expansion, market leader, Maverick Acquisition, Outdoor Activities, Performance Sport Boats, recreational boats | Login |
| - | Fund Letters | SouthernSun Small Cap | SAM | Boston Beer Company, Inc. | Consumer Staples | Brewers | Bull | NASDAQ | brand portfolio, consumer staples, Craft Brewer, debt-free, Flavored Malt Beverages, Hard Seltzer, Manufacturing efficiency, share repurchases | Login |
| - | Fund Letters | SouthernSun Small Cap | AER|AWI|MUSA|NEU|SAIA|WTM | Murphy USA, Inc. | Consumer Discretionary | Specialty Retail | Bull | NYSE | capital discipline, Convenience Store, Fuel Retail, High Volume, Low-Cost Operator, Same-Store Growth, share repurchases, Walmart Outparcels | Login |
| - | Fund Letters | SouthernSun Small Cap | ABDY.L | Dycom Industries, Inc. | Industrials | Construction & Engineering | Bull | NYSE | Construction services, EBITDA growth, Fiber networks, government funding, infrastructure, margin expansion, telecommunications infrastructure, Utility Services | Login |
| - | Fund Letters | SouthernSun Small Cap | ALDAR.AD | Darling Ingredients Inc. | Materials | Chemicals | Bull | NYSE | Bio-nutrients, EBITDA growth, Food waste, Renewable diesel, renewable energy, Sustainable aviation fuel, sustainable products, vertical integration | Login |
| - | Fund Letters | SouthernSun Small Cap | THO | Thor Industries, Inc. | Recreational Vehicles | Recreational Vehicles | Bull | New York Stock Exchange | Acquisitions, Consumer Discretionary, manufacturing, market leader, Motorhomes, Recreational Vehicles, RVs | Login |
| - | Fund Letters | SouthernSun Small Cap | PII | Polaris Inc. | Recreational Vehicles | Recreational Vehicles | Bull | New York Stock Exchange | ATVs, Consumer Discretionary, market share, Off-Road Vehicles, product development, Recreational Vehicles, supply chain | Login |
| - | Fund Letters | SouthernSun Small Cap | CASS | Cass Information Systems, Inc. | Specialty Business Services | Data Processing & Outsourced Services | Bull | NASDAQ | Commercial Banking, information services, Interest rates, manufacturing, payment processing, recovery, Technology Solutions | Login |
| TICKER | COMMENTARY |
|---|---|
| AEIS | Advanced Energy Industries, Inc. (AEIS) was a top contributor in the Small Cap strategy during the quarter. AEIS provides highly engineered power conversion and control solutions for semiconductor equipment and data centers. Shares performed well after the company delivered a strong third-quarter report, exceeding the high end of guidance on the back of record Data Center Computing revenue that more than doubled year-over-year. Total revenue increased 24% year-over-year and Adjusted EPS rose 78%, reflecting both growth and operating leverage. Looking ahead, we spent time with management and others in and around the space during the quarter, and management reiterated that AI-driven demand remains robust and expects Data Center Computing to grow 25–30% in 2026 on secured design wins, supported by incremental capacity in the Philippines and Mexico and a Thailand facility that is ready to ramp quickly. In Semiconductor, customer validation of the eVerest and eVoS platforms underpins our expectation for growth as leading-edge logic and memory spending is expected to strengthen into 2026–2027. The balance sheet remains strong with a $192M net cash position. |
| BOOT | Longer-term holdings such as Boot Barn increased, outperforming benchmark returns |
| CSW | CSW Industrials, Inc. (CSW) is a diversified industrial growth company focused on niche, value added products across three segments: Contractor Solutions, Specialized Reliability Solutions, and Engineered Building Solutions. The portfolio is oriented around products that help customers do the job faster, avoid failures, and protect expensive assets—with core end markets spanning HVAC/R, plumbing, electrical, architecturally-specified building products, and industrial reliability. The core business is Contractor Solutions (~72% of TTM revenue, ~84% of Adj. EBITDA), which sells a broad set of replacement parts, installation accessories, and maintenance and repair tools predominantly used by residential and commercial HVAC and plumbing contractors. Products include HVAC motors and capacitors, evaporator coils, air handlers, condensate pads, pans, pumps, line-set covers, thread sealants, and maintenance chemicals – supported by well-known brands such as RectorSeal, Aspen, MARS, and others. Contractors often ask for CSW products by name and have been using the brands for many years, resulting in pricing power for CSW. Also, management has successfully executed an acquisition playbook in this segment, adding products which immediately benefit from gaining broader distribution through CSW's distribution network. |
| CXT | Crane NXT (CXT) was a bottom contributor in the SMID Cap strategy during the quarter despite delivering solid operating performance in its most recent earnings release. The company reported sales of $445 million (+10% YoY) with a core sales increase of 1%, adjusted operating margin of 24.7%, and adjusted EPS of $1.28, while also raising full-year sales growth guidance. However, management also highlighted macroeconomic uncertainty impacting demand in the Payment Innovations segment. |
| DAR | Darling Ingredients (DAR) was a top contributor in the SMID Cap strategy in the fourth quarter. DAR is the largest publicly traded company turning edible by-products and food waste into sustainable products and a leading producer of renewable energy. Darling has faced significant headwinds over the past couple of years, and the stock traded within a fairly tight range of $30-40 over the past twelve months. This downturn is, in our opinion, at or near a bottom. We see several fundamental and regulatory changes supporting our view that top line and bottom-line results will inflect higher in 2026. |
| DORM | Dorman Products (DORM) was a bottom contributor in the period, even as fundamentals remained constructive in its latest earnings release. Dorman reported net sales of $543.7 million (+7.9% YoY) and meaningful gross profit improvement with gross profit at 44.4% of net sales (up from 40.5% a year ago), reflecting favorable mix and execution—particularly within Light Duty. We believe the share weakness was more about near-term market positioning and expectations than business deterioration, as we see continued strength in the core business and expect solid results to continue. |
| DY | After a long and successful ownership of DY, we decided to exit our position in the fourth quarter in favor of more attractive opportunities. The business is experiencing strong demand from internet providers for fiber deployment, but we believe much of the recent valuation expansion is being driven by AI exuberance. |
| EXTR | Earlier in 2025, we added EXTR to the Small Cap strategy. We have continued to get to know the company throughout the year, and our conviction has built, so in the fourth quarter we added EXTR to the SMID strategy. Extreme Networks is one of the top three players in the enterprise networking industry, although it remains a distant third behind Cisco and Hewlett Packard (HPE), which together control more than 60% of the market. |
| KAI | Kadant Inc. (KAI) is a global supplier of critical components and engineered systems to process industries, primarily pulp, paper, and wood processing. Its products—including debarkers, stranders, chippers, balers, pulpers, rotary joints, and doctor systems—are essential to customers' manufacturing operations. Given the high cost of downtime, customers place a premium on quality, reliability, and service, enabling KAI to price for value. Most of Kadant's product lines hold #1 or #2 market share and have histories spanning over 100 years, resulting in a large installed base that drives a highly recurring parts and services revenue stream (approximately two-thirds of total revenue). While Kadant's underlying end markets grow modestly (roughly 2–3% annually), the company has consistently supplemented organic growth through disciplined bolt-on acquisitions at attractive valuations, typically mid- to high-single-digit EBITDA multiples. Management has clearly articulated acquisition criteria—focused on market-leading positions, critical equipment, and high parts and consumables content—and has demonstrated discipline in adhering to this framework. The acquired businesses tend to generate high returns on tangible assets and strong free cash flow, which Kadant reinvests into additional acquisitions. We expect this capital-allocation flywheel to continue generating mid-teens returns over time. |
| LPX | Louisiana-Pacific Corporation (LPX) |
| TKR | We exited our position in TKR after a long and successful investment in favor of more attractive opportunities. Despite still believing TKR has strong and durable brands in industrial bearings, we don't expect the company's strategy of redeploying capital into acquiring industrial motion businesses to create material value for shareholders. |
| USPH | U.S. Physical Therapy, Inc. (USPH) |
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