Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” first-quarter 2026 investor letter. A copy of the letter can be downloaded here. In a volatile but positive quarter, the FPA Queens Road Small Cap Value Fund (“Fund”) returned 6.07%, beating the Russell 2000 Value Index’s 4.96%. The Fund expects better performance in down markets and underperformance in speculative ones due to its disciplined approach. Amid ongoing global commodity shocks, political issues, and economic fallout from the Iran conflict, the letter discusses small-caps and the firm’s long-term investment strategy. In Q1, the fund continued to rebalance the portfolio towards higher-quality holdings, focusing on balance sheet strength, earnings consistency, and returns on capital. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, FPA Queens Road Small Cap Value Fund highlighted stocks like Upbound Group, Inc. (NASDAQ:UPBD). Upbound Group, Inc. (NASDAQ:UPBD) is a technology and data-driven company that leases household durable goods to customers through its Rent-A-Center, Acima, Mexico, and Franchising segments. On May 11, 2026, Upbound Group, Inc. (NASDAQ:UPBD) closed at $17.99 per share. One-month return of Upbound Group, Inc. (NASDAQ:UPBD) was -6.98%, and its shares lost 29.09% over the past 52 weeks. Upbound Group, Inc. (NASDAQ:UPBD) has a market capitalization of $1.05 billion.
FPA Queens Road Small Cap Value Fund stated the following regarding Upbound Group, Inc. (NASDAQ:UPBD) in its Q1 2026 investor letter:
“Upbound Group, Inc. (NASDAQ:UPBD) lends to sub-prime consumers in two primary segments: Rent-a-Center, which focuses on furniture and appliances through physical stores; and Acima, which offers last-look financing through associated retailers including electronics and tire shops. Sub-prime consumers are struggling but Upbound’s operating results have hung in there. The company has been slow to de-lever after purchasing Acima in 2021 and made another incremental acquisition on Jan. 31, 2025 when it bought Brigit, an app that charges subscription fees to access payday lending. UPBD stock is cheap at less than five times earnings. But we have been slow to add given the company’s leverage and questions about its business model.”
Upbound Group, Inc. (NASDAQ:UPBD) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 22 hedge fund portfolios held Upbound Group, Inc. (NASDAQ:UPBD) at the end of the fourth quarter, compared to 27 in the previous quarter. Upbound Group, Inc. (NASDAQ:UPBD) revenue was $1.2 billion in Q1 2026, up 3.7% year-over-year. While we acknowledge the risk and potential of Upbound Group, Inc. (NASDAQ:UPBD) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Upbound Group, Inc. (NASDAQ:UPBD) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Upbound Group, Inc. (NASDAQ:UPBD) and shared FPA Queens Road Small Cap Value Fund’s views on the company last quarter. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.
Disclosure: None. This article is originally published at Insider Monkey.
