Immersion Investment Partners, an investment management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund gained 18.4% in the third quarter, outperforming the Russell 2000 Index’s 12.4% increase and the Russell Microcap Index’s 17.03% return. The firm invested over 54% of net asset value in its top three names. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its third-quarter 2025 investor letter, Immersion Investment Partners highlighted stocks such as Mama’s Creations, Inc. (NASDAQ:MAMA). Mama’s Creations, Inc. (NASDAQ:MAMA) manufactures and markets fresh deli-prepared foods. The one-month return of Mama’s Creations, Inc. (NASDAQ:MAMA) was 1.88%, and its shares gained 51.29% of their value over the last 52 weeks. On October 30, 2025, Mama’s Creations, Inc. (NASDAQ:MAMA) stock closed at $10.54 per share, with a market capitalization of $439.005 million.
Immersion Investment Partners stated the following regarding Mama’s Creations, Inc. (NASDAQ:MAMA) in its third quarter 2025 investor letter:
“Three days after the Celsius announcement, Mama’s Creations, Inc. (NASDAQ:MAMA) – Doubted Champion) announced the acquisition of Crown I Enterprises, a small prepared foods division of Sysco. The acquisition came with $56 million in sales and a recently upgraded 42,000 square foot production facility just 10 miles from Mama’s existing facility in Farmingdale, NY. We think the deal is a slam dunk. Mama’s was able to acquire the business for just $17.5 million or 2x our estimate of gross profit, which we think can double over the next twelve months just through Mama consolidating protein purchases under their umbrella. We believe Mama was able to get the business so cheaply because Sysco viewed the business as an inconsequential part of their overall operation. Per management, Crown’s only directive for the last several years was, “Stay out of the news.” Crown had zero salespeople and was solely concerned with food safety vs. growth. The potential reputational damage to a company like Sysco from a food safety incident is more significant than the benefit of a $50 million subsidiary doubling in size when the parent does $81 billion. Adding Crown’s capacity to Mama’s existing sales team could result in material growth for the business.
More importantly, the deal gave legitimacy to MAMA’s acquisition strategy: 1.) Have an existing product being sold to customers not known to MAMA. 2.) Have a tangential deli product that is being produced in-house with geographically advantageous locations. And 3.) Don’t overpay.
Despite a significant jump in Mama shares over the past few months, the market and sell-side analysts have yet to catch up to the benefits of the Crown acquisition, which could result in $30 million in consolidated adjusted EBITDA on a go-forward basis vs. current FY2027 street estimates of just $21 million. The stock is still quite cheap, even more so if one were to give credit for future acquisitions, which management has indicated a desire for after the closing of the Crown deal. Regardless, we have a profitable business growing sales 20%+ with margin expansion opportunities, and a strong balance sheet to support future M&A activities. A low-teens EBITDA multiple on that setup is simply too cheap.”
Mama’s Creations, Inc. (NASDAQ:MAMA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 9 hedge fund portfolios held Mama’s Creations, Inc. (NASDAQ:MAMA) at the end of the second quarter, up from 7 at the end of the previous quarter. In the second quarter of fiscal 2026, Mama’s Creations, Inc.’s (NASDAQ:MAMA) revenue increased 24% to $35.2 million as compared to $28.4 million in the same year ago quarter. While we acknowledge the risk and potential of Mama’s Creations, Inc. (NASDAQ:MAMA) 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 Mama’s Creations, Inc. (NASDAQ:MAMA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Mama’s Creations, Inc. (NASDAQ:MAMA) and shared Conestoga Capital Advisors’ views on the company. 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.
