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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Fenimore Value Strategy 2026 Q3 Investor Letter | Buyside Digest

Back to Fund Profile (Fenimore Value Strategy)

Primary Source Intelligence • Q3 2026 Letter Analysis

Fenimore Value Strategy Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Fenimore Value Strategy. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD-2.13%

Annualized+10.25%

Positioning StanceCONSTRUCTIVE

Market CapMid Cap

GeographyUS

Digest Analysis

Quick Take

"Outperforming the Russell Midcap Index driven by strong selection in consumer discretionary and industrials, while opportunistically scaling positions in Thermo Fisher and S&P Global."

Executive Summary

During the third quarter of 2026, the Fenimore Value Strategy (FAM Value Fund Investor Class) returned -2.13% net of fees, outperforming its benchmark, the Russell Midcap Index, which declined -3.00% net of fees. Relative outperformance was driven by disciplined stock selection across consumer discretionary and industrial holdings, though returns were partially dampened by allocations to insurance-related financial companies. The fund ended the quarter with a 1.9% cash balance, reflecting a nearly fully invested posture, and handled approximately $25.2 million of quarterly redemptions via in-kind distributions rather than open-market sales. The macroeconomic environment was shaped by rising interest rates, elevated energy prices driven by geopolitical unrest in the Middle East, and ongoing inflation pressures that prompted the Federal Reserve to lift the federal funds rate to 3.75%-4.00%. Concurrently, market leadership became exceedingly narrow, heavily favoring mega-cap technology and artificial intelligence infrastructure beneficiaries while mid-cap equities faced significant valuation dispersion and declining stock-to-stock correlations. Portfolio activity was measured following an active first half of the year. The strategy opportunistically added to core positions in Thermo Fisher Scientific and S&P Global, funded by the full liquidation of ExlService Holdings. The manager also disposed of shares in Mobility Global received via spinoff, while top contributors Zebra Technologies and Ross Stores delivered resilient operational results against detraction in Vulcan Materials and Brookfield Corp.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

78%

CautiousHigh

High Conviction (78%)

Fenimore manages a concentrated portfolio with top 10 holdings accounting for over 53% of fund assets and Ross Stores exceeding 7%. Positions are specifically sized and articulated with clear fundamental rationales, while the manager avoided panic-selling during broader market weakness.

Growth Outlook

52%

BearishBullish

Neutral (52%)

The manager remains balanced to mildly constructive, acknowledging macro uncertainties from persistent inflation and high borrowing costs alongside opportunities created by narrow market dispersion and overlooked high-quality businesses.

Risk Appetite

72%

DefensiveAggressive

Aggressive (72%)

The portfolio ended the quarter nearly fully invested with only 1.9% cash and continues to selectively scale equity positions in high-quality compounders without broad macro hedging or defensive cash build.

Capital Deployment

48%

De-riskingDeploying

Net Neutral (48%)

Following a very active first half of 2026, portfolio activity moderated in the third quarter with additions funded by targeted sales and cash closing at a steady 1.9%.

Forward Guidance

65%

CautiousExpansionary

Expansionary (65%)

Management explicitly notes that performance dispersion and low correlations may lead to increased trading activity in coming quarters to capitalize on mispricings, maintaining a selective deployment bias.

Language Signal

58%

BearishBullish

Balanced (58%)

Language balances discussions of headwind risks (inflation, rate hikes, energy disruptions) with constructive terminology such as 'attractive margin of safety', 'undervalued', and 'compound intrinsic value'.

Perceived Risk

62%

Low RiskElevated

Moderate Risk (62%)

The manager identifies specific macroeconomic risks including rising borrowing costs, a 19-year high in 10-year Treasury yields, persistent inflation, and geopolitical conflicts elevating energy prices.

Opportunity Density

64%

ScarceAbundant

Selective (64%)

The letter emphasizes that narrow market concentration and widening stock performance gaps are opening opportunities in sound businesses whose valuations fail to reflect their long-term potential.

Time Horizon

82%

Short-TermLong-Term

Decade+ (82%)

Fenimore emphasizes owning companies that can compound intrinsic value over multi-year periods, looking through near-term sentiment volatility and ignoring short-term prognostications.