Palm Valley Capital Fund Keeps Defensive Stance in Q4, Gains 0.66% as It Ups T‑Bill Cushion

Overview

• The fund lifted its Treasury-bill allocation from 74.1% to 76.3% in Q4, contributing to underperformance versus the S&P SmallCap 600 (+1.70%) and Morningstar Small Cap Index (+3.12%).
• Equity holdings rose 1.12% for the quarter, helped by the fund’s precious-metals sleeve, with silver remaining its largest allocation.
• Flowers Foods was a top detractor, yet the fund increased its stake, citing about 10x earnings valuation and a high dividend yield as consumers trade down to private label and away from loaf bread.
• Heartland Express was a top contributor, with the letter noting trucking rates appear to be bottoming, profitability could improve in 2026, and net debt has fallen roughly 60% over three years.
• Palm Valley initiated a position in Ingredion at about 10x earnings with a roughly 3% dividend yield, noting ongoing recovery from a June fire at its Chicago plant and secular HFCS headwinds, and it kept initial weights modest.