Palm Valley Capital Management, an investment management firm, has released the “Palm Valley Capital Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, Palm Valley Capital Fund appreciated 0.66% compared to a 1.70% gain for the S&P SmallCap 600 and a 3.12% rise in the Morningstar Small Cap Total Return Index. At the beginning of the quarter, the Fund allocated 74.1% to Treasury bills and increased to 76.3% by the end of the quarter. The equity holdings of the Fund rose by 1.12% over the past three months (excluding the effects of fund operating expenses). The performance of equities was positively influenced by the investments in precious metals, particularly as silver has been the Fund’s largest allocation for the past few 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, Palm Valley Capital Fund highlighted stocks such as Utz Brands, Inc. (NYSE:UTZ). Utz Brands, Inc. (NYSE:UTZ) is a U.S.-based snack foods manufacturer. The one-month return of Utz Brands, Inc. (NYSE:UTZ) was 0.51%, and its shares lost 30.53% of their value over the last 52 weeks. On January 5, 2026, Utz Brands, Inc. (NYSE:UTZ) stock closed at $9.83 per share, with a market capitalization of $860.221 million.
Palm Valley Capital Fund stated the following regarding Utz Brands, Inc. (NYSE:UTZ) in its fourth quarter 2025 investor letter:
“During the fourth quarter, we bought three new positions: Domino’s Pizza Group plc (ticker: DOM LN), Utz Brands, Inc. (NYSE:UTZ), and Ingredion (ticker: INGR). As has been the case for several years, our initial weightings in new names have been fairly modest because most of them were just reaching our minimum required discount. Founded in 1921, Utz Brands, Inc. is a leading U.S. manufacturer of salty snacks, including potato chips, tortilla chips, pretzels, cheese snacks, and pork skins. Its portfolio includes bands such as Utz, Zapp’s, On The Border, Golden Flake, and Boulder Canyon. Utz has invested heavily in productivity initiatives and geographic expansion. As a result, capital expenditures have been elevated, averaging $100 million annually over the past two years. High investment spending and growth have contributed to above average financial leverage as well. Looking ahead, management expects capital expenditures to normalize in 2026, declining to $60-$70 million per year. Combined with the proceeds from facility sales, the reduction in spending should allow for debt to decline soon. As a salty snack business, Utz enjoys attractive margins, consistent demand, and strong free cash flow potential. Utz is well positioned with several brands delivering healthy organic growth that are gaining market share. Boulder Canyon chips, in particular, have performed exceptionally well over the past year, benefiting from consumer demand for “better-for you” snacks made with non-seed oils. We are attracted to Utz’s steady business, improving free cash flow, and a balance sheet that we believe will improve considerably over the next year. At the time of purchase, the shares traded at approximately 12x our 2026 free cash flow estimate and offered a 2.6% dividend yield.”
Utz Brands, Inc. (NYSE:UTZ) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 16 hedge fund portfolios held Utz Brands, Inc. (NYSE:UTZ) at the end of the third quarter, compared to 20 in the previous quarter. While we acknowledge the risk and potential of Utz Brands, Inc. (NYSE:UTZ) 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 Utz Brands, Inc. (NYSE:UTZ) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Utz Brands, Inc. (NYSE:UTZ) and shared the list of most undervalued small cap stocks to invest in. 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.
