| 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. |
| 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 |
| 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 | 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 | 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 | 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 | SCL | Stepan Company | Materials | Specialty Chemicals | Bull | NYSE | capacity expansion, deleveraging, EBITDA, Polymers, specialty chemicals, Surfactants | 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 | 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 | MOD | Modine Manufacturing Company | Industrials | Industrial Machinery | Bull | NYSE | data center cooling, Electric Vehicles, Heat Exchangers, HVAC, operational excellence, thermal management, turnaround | 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 | 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 | 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 | 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 |
| 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 | 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 | NGVT | Ingevity Corporation | Materials | Specialty Chemicals | Neutral | NYSE | Activated-carbon, Automotive Emissions, Cost Reduction, industrial applications, Management Change, Performance Materials, restructuring, specialty chemicals | 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 |
| 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 | 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 | 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 |
| 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 |
| 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 | 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 | 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 |
| 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 |
| - | 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 | 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 | 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 |
| 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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