Optimist Fund, an investment management company, released its second-quarter 2026 investor letter. A copy of the letter is available to download here. Fund performance improved significantly in Q2, achieving a return of 36.3% as tensions in Iran eased. Since inception, it has met its goal of annualized returns of 16.5%. The outlook for the next five years is optimistic, with the portfolio viewed as comprising market leaders with strong growth potential and well-aligned management teams. Additionally, reviewing the Fund’s top five holdings could help identify its best picks for 2026.
In its Q2 2026 investor letter, Optimist Fund highlighted First Advantage Corporation (NASDAQ:FA). First Advantage Corporation (NASDAQ:FA) is a US-based company that provides employment background screening, identity, and verification solutions. On August 13, 2026, First Advantage Corporation (NASDAQ:FA) closed at $22.20 per share. The one-month return of First Advantage Corporation (NASDAQ:FA) was -0.67%, and its shares gained 34.71% over the past 52 weeks. First Advantage Corporation (NASDAQ:FA) has a market capitalization of $3.81 billion.
Optimist Fund stated the following regarding First Advantage Corporation (NASDAQ:FA) in its Q2 2026 investor letter:
“First Advantage Corporation (NASDAQ:FA) — Organic revenue grew 9%, EBITDA (earnings before interest, taxes, depreciation and amortization) grew 14%, and adjusted EPS grew 52% year-over-year, all beating expectations. Full-year guidance was reiterated. The stock has rebounded materially from its lows, but our view hasn’t changed with the price: we believe this is an $80+ stock in five years.”
First Advantage Corporation (NASDAQ:FA) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 21 hedge fund portfolios held First Advantage Corporation (NASDAQ:FA) at the end of the first quarter, up from 15 in the previous quarter. While we acknowledge the risk and potential of First Advantage Corporation (NASDAQ:FA) 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 First Advantage Corporation (NASDAQ:FA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered First Advantage Corporation (NASDAQ:FA) and shared Optimist Fund’s insight on the company. In addition, please check out our hedge fund investor letters Q2 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.
