Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund returned -2.51% compared to a -7.74% return for the Russell 2000 Value Index. President Trump announced his tariffs on April 2nd, causing equity markets to decline sharply and increasing volatility. Additionally, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its first-quarter 2025 investor letter, FPA Queens Road Small Cap Value Fund highlighted stocks such as REV Group, Inc. (NYSE:REVG). REV Group, Inc. (NYSE:REVG) manufactures and supplies specialty vehicles and related aftermarket parts and services. The one-month return of REV Group, Inc. (NYSE:REVG) was 16.36%, and its shares gained 41.86% of their value over the last 52 weeks. On May 21, 2025, REV Group, Inc. (NYSE:REVG) stock closed at $37.55 per share with a market capitalization of $1.94 billion.
FPA Queens Road Small Cap Value Fund stated the following regarding REV Group, Inc. (NYSE:REVG) in its Q1 2025 investor letter:
“In the first quarter of 2025, the Fund acquired a new position in REV Group, Inc. (NYSE:REVG) with a roughly 1.5% weight at quarter end. Rev Group manufactures fire trucks, ambulances and recreational vehicles and is currently benefiting from a strong selling cycle in its municipal businesses. REV Group has increased pricing on its roughly three-year backlog of municipal orders and is guiding to significantly higher margins by 2027. Higher pricing is being corroborated by REVG’s main competitor in fire trucks, Pierce (owned by OshKosh Corporation, another portfolio holding). We are cautiously optimistic that higher pricing and increasing backlogs are indicative of an improved industry structure and a higher quality business going forward.”
A technician installing a replacement part on a specialty vehicle, surrounded by a team of professionals.
REV Group, Inc. (NYSE:REVG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held REV Group, Inc. (NYSE:REVG) at the end of the fourth quarter which was 16 in the previous quarter. In the first quarter, REV Group, Inc. (NYSE:REVG) generated net sales of $525 million, a decrease of 61 million from the prior year’s quarter. While we acknowledge the potential of REV Group, Inc. (NYSE:REVG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered REV Group, Inc. (NYSE:REVG) and shared abrdn U.S. Small Cap Equity Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
