Minot Light Capital Partners, an investment management company, released its Q3 2025 investment letter. A copy of the letter can be downloaded here. In the quarter, Minot Light generated solid returns for limited partners, with a net of 7.6%. However, on a net basis, the performance underperformed the benchmarks, particularly the micro-cap benchmark’s 17.1% return. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, Minot Light Capital Partners highlighted stocks such as Torrid Holdings Inc. (NYSE:CURV). Torrid Holdings Inc. (NYSE:CURV) is a retailer that provides apparel, intimates, and accessories for curvy women. The one-month return for Torrid Holdings Inc. (NYSE:CURV) was -20.91%, and its shares lost 80.27% over the last 52 weeks. On December 23, 2025, Torrid Holdings Inc. (NYSE:CURV) stock closed at $0.9807 per share, with a market capitalization of $97.282 million.
Minot Light Capital Partners stated the following regarding Torrid Holdings Inc. (NYSE:CURV) in its third quarter 2025 investor letter:
Torrid Holdings Inc. (NYSE:CURV): Our biggest negative contributor this quarter was Torrid Holdings. We reviewed our thesis on Torrid in our last quarterly letter and that has not changed, so we will not rehash that here. In the interval between that letter and this update, the company did report earnings. Though we did not view the results as a disaster, numbers did come down due to tariff impacts and a weaker consumer. That said, the key levers to our differing perspective, which center around projected margin expansion from eliminating the weaker portion of their store base, revenue retention from closed stores going to adjacent stores or online, and additional margin expansion from growing sub-brand sales would appear to be generally intact. The company continues to project meaningful EBITDA margin and free cash flow expansion into 2026 and beyond due to these factors. However, we will now see that expansion off of a lower base.
Though our thesis does not seem to be broken, shares of Torrid have not stopped falling since Sycamore’s secondary, which we thought would only lead to a temporary decline. Stock price action like this is certainly very concerning to us. Though we have a hard time believing the fundamentals of the business are deteriorating as fast as the stock price is indicating, we do have to concede when leverage is involved on micro-cap retailers, things can deteriorate quickly in a worst-case scenario. At current prices of around $1.50, if the company comes anywhere near its EBITDA and free cash flow goals over the next several years, the upside to this stock could be enormous. In that scenario, it could either buy back its entire company or pay back all of its debt in less than four years. It could also do some combination of both. That said, we are closely monitoring progress and managing our risk exposure on this position. Embarking on a major business model transition during a very difficult macro period with debt on the balance sheet is not easy and the risks are high. …” (Click here to read the full text)
Torrid Holdings Inc. (NYSE:CURV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 7 hedge fund portfolios held Torrid Holdings Inc. (NYSE:CURV) at the end of the third quarter, compared to 15 in the previous quarter. While we acknowledge the risk and potential of Torrid Holdings Inc. (NYSE:CURV) 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 Torrid Holdings Inc. (NYSE:CURV) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
Disclosure: None. This article is originally published at Insider Monkey.
