Prosper Stars & Stripes, a long/short equity fund, recently released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter of 2025, Prosper Stars & Stripes achieved a net return of +9.8%. In comparison, its long/short equity hedge fund peer group, as indicated by the HFRX Equity Hedge (Total) Index (the “HFRX”), reported a total return of +3.8%. Additionally, the long-only small-cap Russell 2000 Index (the “Russell”) had a total return of +12.4%. Year to date, the fund returned +8.6% compared to a total return of +13.6% for the HFRI and +10.4% for the Russell. The Composite’s long book delivered strong performance in both the third quarter and year-to-date 2025. The short book detracted from performance both in the third quarter and year-to-date in 2025. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, Prosper Stars & Stripes highlighted stocks such as Jack in the Box Inc. (NASDAQ:JACK). Jack in the Box Inc. (NASDAQ:JACK) franchises and operates a chain of quick-service restaurants. The one-month return of Jack in the Box Inc. (NASDAQ:JACK) was 27.36%, and its shares lost 58.48% of their value over the last 52 weeks. On November 27, 2025, Jack in the Box Inc. (NASDAQ:JACK) stock closed at $19.46 per share, with a market capitalization of $367.732 million.
Prosper Stars & Stripes stated the following regarding Jack in the Box Inc. (NASDAQ:JACK) in its third quarter 2025 investor letter:
“Short opportunities continue to present themselves, and the Composite has generated success in several areas. One framework that has worked well for us is based on the challenges of the so-called K-shaped economy. This concept refers to the divergence where lower-income consumers struggle with inflation, while wealthier segments remain relatively unaffected. Pressure has been particularly evident in the food and beverage sector, which already has low growth rates. With consumers feeling the squeeze, spending has been at greater risk. In addition, the rapid adoption of GLP-1 medications has further disrupted consumption habits, reducing average calorie intake by 16 39%.16 As a result, companies in this space are finding it increasingly difficult to deliver on growth plans. Restaurants face additional challenges as strained budgets lead to less dining out. Against this backdrop, we see further downside for Jack in the Box Inc. (NASDAQ:JACK). We believe the concept lacks differentiation, and the business is struggling to offset traffic headwinds. Persistent input cost and labor pressures compound the difficulty of generating top-line growth in an intensely competitive market. We expect JACK will disappoint and guide lower when it reports earnings. While the company sold its Del Taco brand, net leverage remains above 5x. Notably, JACK sold Del Taco for $115 million at 6.5X estimated EBITDA.18 The company paid $585M for it in 2022. While this is in the past, it highlights the difficulty in creating value in the industry, shows a poor capital deployment record of the fiduciaries and it demonstrates where multiples can go for a challenged business.”
Jack in the Box Inc. (NASDAQ:JACK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held Jack in the Box Inc. (NASDAQ:JACK) at the end of the third quarter, which was 21 in the previous quarter. While we acknowledge the risk and potential of Jack in the Box Inc. (NASDAQ:JACK) 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 Jack in the Box Inc. (NASDAQ:JACK) 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.
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Disclosure: None. This article is originally published at Insider Monkey.
