SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun Small Cap Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. During the quarter, the Small Cap Composite returned -2.45% on a gross basis (-2.64% net) compared to 2.19% for the Russell 2000 Index and 3.26% return for the Russell 2000 Value Index. The Composite returned 6.21% on a gross basis (5.40% net) over the trailing 12 months compared to 12.81% and 12.59% for the indexes, respectively. The letter highlighted the economic lessons learned during the oil price collapse of 2014-15. Initially seen as a positive development for the global economy, the decline in oil prices later revealed underlying weaknesses, leading to broader economic impacts beyond the energy sector. The author compares this to the current situation with artificial intelligence (AI), cautioning that while AI is now a fundamental aspect of economic planning and decision-making, its associated risks must be carefully analyzed. As the market approaches 2026, the investment landscape is shaped by various scenarios, including valuation compression and overcapacity in AI infrastructure, rather than inevitable outcomes. SouthernSun Asset Management maintains a disciplined, humble approach focused on intrinsic value and is optimistic about the future but remains aware of historical lessons. In addition, please check the Strategy’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, SouthernSun Small Cap Strategy highlighted stocks like Dorman Products, Inc. (NASDAQ:DORM). Headquartered in Colmar, Pennsylvania, Dorman Products, Inc. (NASDAQ:DORM) is an aftermarket automotive products supplier. On February 27, 2026, Dorman Products, Inc. (NASDAQ:DORM) stock closed at $117.86 per share. One-month return of Dorman Products, Inc. (NASDAQ:DORM) was -6.90%, and its shares lost 10.17% over the past 52 weeks. Dorman Products, Inc. (NASDAQ:DORM) has a market capitalization of $3.602 billion.
SouthernSun Small Cap Strategy stated the following regarding Dorman Products, Inc. (NASDAQ:DORM) in its fourth quarter 2025 investor letter:
“Dorman Products, Inc. (NASDAQ:DORM) was a bottom contributor in the period, even as fundamentals remained constructive in its latest earnings release. Dorman reported net sales of $543.7 million (+7.9% YoY) and meaningful gross profit improvement with gross profit at 44.4% of net sales (up from 40.5% a year ago), reflecting favorable mix and execution—particularly within Light Duty. We believe the share weakness was more about near-term market positioning and expectations than business deterioration, as we see continued strength in the core business and expect solid results to continue.”
Dorman Products, Inc. (NASDAQ:DORM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 21 hedge fund portfolios held Dorman Products, Inc. (NASDAQ:DORM) at the end of the fourth quarter, up from 19 in the previous quarter. While we acknowledge the risk and potential of Dorman Products, Inc. (NASDAQ:DORM) 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 Dorman Products, Inc. (NASDAQ:DORM) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Dorman Products, Inc. (NASDAQ:DORM) and shared a list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q4 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.
