Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund returned -0.36% in Q4 2025, compared to the Russell 2000 Value Index’s 3.26%. In 2025, the Fund has returned 13.36% compared to 12.59% gain for the Index. The Fund outperformed in the first half of 2025, when markets were weak and volatile. However, in the second half of 2025, markets favored speculative and low-quality stocks, leading to the Fund’s underperformance. The portfolio is designed to protect clients from market drawdowns by focusing on quality and value. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, FPA Queens Road Small Cap Value Fund highlighted stocks like Upbound Group, Inc. (NASDAQ:UPBD). Upbound Group, Inc. (NASDAQ:UPBD) leases household durable goods to customers that operates through Rent-A-Center, Acima, Mexico, and Franchising segments. On February 12, 2026, Upbound Group, Inc. (NASDAQ:UPBD) stock closed at $19.83 per share. One-month return of Upbound Group, Inc. (NASDAQ:UPBD) was -1.59%, and its shares are down 32.67% over the past twelve months. Upbound Group, Inc. (NASDAQ:UPBD) has a market capitalization of $1.15 billion.
FPA Queens Road Small Cap Value Fund stated the following regarding Upbound Group, Inc. (NASDAQ:UPBD) in its fourth quarter 2025 investor letter:
“Upbound Group, Inc. (NASDAQ:UPBD) is a sub-prime lender that employs a rent-to-own model. The company has two primary segments: Rent-a-Center, which focuses on furniture and appliances through physical stores; and Acima, which offers last look financing through associated retailers including electronics and tire shops. Sub prime consumers have struggled this year and Upbound’s operating results have ticked down. The company has been slow to de-lever after purchasing Acima in 2021 and made another incremental acquisition on Jan. 31, when it bought Brigit, an app which charges subscription fees to access payday lending. UPBD stock is cheap at less than five times forward earnings. But we have been slow to add given the company’s leverage and questions about its business model.”
Upbound Group, Inc. (NASDAQ:UPBD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 27 hedge fund portfolios held Upbound Group, Inc. (NASDAQ:UPBD) at the end of the third quarter, up from 22 in the previous quarter. While we acknowledge the risk and potential of UPBOUND GROUP, INC. (NASDAQ:UPBD) 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 UPBOUND GROUP, INC. (NASDAQ:UPBD) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered UPBOUND GROUP, INC. (NASDAQ:UPBD) and shared a list of dividend stocks with over 8% yield. 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.
