Prosper Stars & Stripes, a long/short equity fund, recently released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter of 2025, Prosper Stars & Stripes achieved a net return of +9.8%. In comparison, its long/short equity hedge fund peer group, as indicated by the HFRX Equity Hedge (Total) Index (the “HFRX”), reported a total return of +3.8%. Additionally, the long-only small-cap Russell 2000 Index (the “Russell”) had a total return of +12.4%. Year to date, the fund returned +8.6% compared to a total return of +13.6% for the HFRI and +10.4% for the Russell. The Composite’s long book delivered strong performance in both the third quarter and year-to-date 2025. The short book detracted from performance both in the third quarter and year-to-date in 2025. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, Prosper Stars & Stripes highlighted stocks such as Ralliant Corporation (NYSE:RAL). Ralliant Corporation (NYSE:RAL) is a precision instruments and engineered products manufacturer. The one-month return of Ralliant Corporation (NYSE:RAL) was 11.83%, and its shares gained 14.27% of their value over the last three months. On November 27, 2025, Ralliant Corporation (NYSE:RAL) stock closed at $48.78 per share, with a market capitalization of $5.503 billion.
Prosper Stars & Stripes stated the following regarding Ralliant Corporation (NYSE:RAL) in its third quarter 2025 investor letter:
“The Composite continues its disciplined process of seeking to invest in compelling long and short positions based on our philosophy, while considering the broader investing backdrop and market realities. We target a mix of positions that capitalize on unique opportunities, align with thematic trends, and exploit cyclical ebbs and flows in the economy and market. Reflecting our commitment to the first category of ideas, the Composite initiated a position in Ralliant Corporation (NYSE:RAL). We often seek attractive opportunities in companies undergoing corporate change, as the market is typically slow to evaluate new entities. RAL spun out of Fortive in June 2025. With an energized CEO and employee base, we believe the company is positioned to prove itself. RAL has growth rates and margins comparable to high-quality industrial stocks, and as results improve, we expect the stock to rise on positive earnings revisions and multiple expansion. Ralliant’s Sensor & Safety Systems segment sells into utilities and defense industries. These segments are benefiting from increased demand for power generation and grid modernization, as well as rising global defense spending. In Test and Measurement, we believe sales trends are likely to improve as companies are incentivized to invest in R&D. Heading into 2026, improving trends should support earnings growth, and we believe the stock will approach 15x EV/EBITDA, resulting in a price target in excess of $60.”
Ralliant Corporation (NYSE:RAL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. AAs per our database, 45 hedge fund portfolios held Ralliant Corporation (NYSE:RAL) at the end of the third quarter, which was 40 in the previous quarter. In the third quarter, Ralliant Corporation (NYSE:RAL) generated $529 million in revenue, which is approximately the same as the previous year. While we acknowledge the risk and potential of Ralliant Corporation (NYSE:RAL) 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 Ralliant Corporation (NYSE:RAL) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Ralliant Corporation (NYSE:RAL) and shared the list of most promising new technology stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
