Optimist Fund, an investment management company, released its fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund’s objective is to achieve capital growth at a rate in the mid-teens or higher over the course of several decades. In Q4 2025, the Fund declined 8.5%. The Fund, although not yet five years old, invests with a five-year perspective. While short-term drawdowns can be tough, the Fund is optimistic about the portfolio’s fundamental performance and confident in prospective returns over the next five years. The Fund believes that current valuations significantly underestimate the earnings and cash flow the core holdings will produce in five years. In addition, please check the Fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Optimist Fund highlighted stocks like Latham Group, Inc. (NASDAQ:SWIM). Latham Group, Inc. (NASDAQ:SWIM) is an in-ground residential swimming pool manufacturer operating across North America, Australia, and New Zealand. On February 27, 2026, Latham Group, Inc. (NASDAQ:SWIM) stock closed at $6.71 per share. One-month return of Latham Group, Inc. (NASDAQ:SWIM) was 5.84%, and its shares gained 21.78% over the past 52 weeks. Latham Group, Inc. (NASDAQ:SWIM) has a market capitalization of $782.76 million.
Optimist Fund stated the following regarding Latham Group, Inc. (NASDAQ:SWIM) in its fourth quarter 2025 investor letter:
“Latham Group, Inc. (NASDAQ:SWIM) – Latham delivered a solid third quarter, with net sales of approximately $162 million, up ~7.6% year-over-year, outperforming a generally flat U.S. in-ground pool market and reflecting continued traction across key product lines, including pool covers, liners, and fiberglass pools. Adjusted EBITDA itself grew roughly 28.5% to about $38.3 million. Latham also narrowed and modestly raised its full-year guidance, signaling confidence in its outlook despite broader industry headwinds, with net sales now expected in the ~$540–$550 million range and adjusted EBITDA of ~$92 $98 million. Overall, the quarter demonstrated a business that continues to grow revenue, expand profitability, and execute on strategic priorities even in challenging end-market conditions. We are pleased with results.
On the negative side, Latham’s CEO, Scott Rajeski, announced his retirement. The incoming CEO appears credible, coming from James Hardie, a much larger organization, but we have not yet had the opportunity to engage with him and plan to do so following year-end results. Given the unexpected leadership change, we reduced the position from 6% to 3% of the fund. This was not driven by a change in our view of the business, but by our emphasis on management quality and familiarity. Until we build conviction in the new leadership, our overall conviction is lower.”
Latham Group, Inc. (NASDAQ:SWIM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 27 hedge fund portfolios held Latham Group, Inc. (NASDAQ:SWIM) at the end of the fourth quarter, up from 20 in the previous quarter. While we acknowledge the risk and potential of Latham Group, Inc. (NASDAQ:SWIM) 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 Latham Group, Inc. (NASDAQ:SWIM) 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 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.
