Overview
- The fund, which released its Q1 letter Thursday, reported a 0.74% return that trailed the S&P SmallCap 600’s 3.51%.
- Top contributors were Chord Energy, Heartland Express, and Farmland Partners, and the managers trimmed Chord and Heartland as each approached their valuation targets.
- Farmland Partners posted better-than-expected results, raised its dividend by 50%, and completed about 60 property sales over the past year with an overall 38% gain.
- Detractors reflected sector strains: Flowers Foods faced bread category volume declines tied in part to GLP-1 weight-loss drug adoption and weak consumer demand, Resources Connection cut costs as revenue fell and clients automated finance roles, and Amdocs dropped despite what the fund views as low AI disruption risk and a valuation near 10 times free cash flow.
- Several holdings carry explicit catalysts, including Teleflex planning two asset sales to reduce debt and buy back stock, LKQ launching a strategic review that could include a sale of the company, and Kelly Services gaining a new controlling shareholder who paid more than four times the nonvoting share price in January 2026.