Brown Capital Management, an investment management company, released its first quarter 2026 investor letter for “The Brown Capital Management Small Company Fund”. A copy of the letter can be downloaded here. In the first quarter of 2026, the Small Company Fund (Investor shares) fell 19.78%, significantly lagging the Russell 2000 Growth index’s 2.81% decline. Worsened market conditions due to the Iran war, driving the oil price spike and increased volatility in equities. Despite stabilization in the performance as the quarter progressed, early declines and weakness in large positions significantly impacted the Fund’s performance. Please review the Fund’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, The Brown Capital Management Small Company Fund highlighted XPEL, Inc. (NASDAQ:XPEL). XPEL, Inc. (NASDAQ:XPEL) is a US-based company that manufactures and distributes protective films, coatings, and related services. On June 23, 2026, XPEL, Inc. (NASDAQ:XPEL) closed at $45.96 per share. One-month return of XPEL, Inc. (NASDAQ:XPEL) was -3.36%, and its shares gained 29.36% over the past 52 weeks. XPEL, Inc. (NASDAQ:XPEL) has a market capitalization of $1.27 billion.
The Brown Capital Management Small Company Fund stated the following regarding XPEL, Inc. (NASDAQ:XPEL) in its Q1 2026 investor letter:
“We added four companies to the Small Company Fund in the first quarter of 2026—Credo Technology (CRDO), Krystal Biotech (KRYS), SiTime (SITM) and XPEL, Inc. (NASDAQ:XPEL).
Xpel develops surface-protection products and services used primarily in the automotive industry. The company’s core business is paint protection film (PPF)—a transparent, self-healing urethane film applied to cars to protect against scratches, chips and other surface damage. Xpel also produces window films, ceramic coatings and windshield-protection films that are complementary to its flagship PPF offering. The PPF market is estimated to be less than 10% penetrated on cars in the U.S. and globally, and Xpel has been instrumental over the last several years in increasing awareness about the product in order to grow the market. Initially embraced by car enthusiasts for high-end sports cars, PPF is now increasingly used on luxury and mainstream sedans and SUVs. Xpel pursues a multi-channel strategy that is unique in the market, selling its products globally through automotive aftermarket shops, car dealerships and auto manufacturers. Xpel stands out because it has software that helps installers apply its products (like paint protection film) more quickly and with better precision. The software provides exact cut patterns for each vehicle, so installers don’t have to measure and trim everything by hand—saving time, money and headaches.”
XPEL, Inc. (NASDAQ:XPEL) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 23 hedge fund portfolios held XPEL, Inc. (NASDAQ:XPEL) at the end of the first quarter, up from 21 in the previous quarter. While we acknowledge the risk and potential of XPEL, Inc. (NASDAQ:XPEL) 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 XPEL, Inc. (NASDAQ:XPEL) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered XPEL, Inc. (NASDAQ:XPEL) and shared a bullish thesis on the stock. In addition, please check out our hedge fund investor letters Q1 2026 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.
