Madison Investments, an investment advisor, released its fourth-quarter 2025 investor letter for “Madison Small Cap Fund”. A copy of the letter can be downloaded here. The fourth quarter was challenging for the fund and continued to underperform its benchmark, the Russell 2000 Index. The fund (Class I) returned -0.4%, lagging the benchmark’s 2.2% return. Sector allocation negatively impacted the Fund’s performance this quarter, with healthcare being the weakest sector. The Fund remains optimistic that the speculative market is losing momentum, but cautious, given the saying “markets can stay irrational longer than you can stay solvent”. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its fourth-quarter 2025 investor letter, Madison Small Cap Fund highlighted stocks like Primo Brands Corporation (NYSE:PRMB). Primo Brands Corporation (NYSE:PRMB) is a North American beverage company. On March 13, 2026, Primo Brands Corporation (NYSE:PRMB) stock closed at $20.76 per share. Primo Brands Corporation (NYSE:PRMB) delivered a 10.66% return in the past month, and its shares lost 35.69% of their value over the past twelve months. Primo Brands Corporation (NYSE:PRMB) has a market capitalization of $7.591 billion.
Madison Small Cap Fund stated the following regarding Primo Brands Corporation (NYSE:PRMB) in its fourth quarter 2025 investor letter:
“On the other hand, longtime portfolio holding Primo Brands Corporation (NYSE:PRMB), saw its stock price cut in half. We acquired PRMB back in 2020. We like the water delivery business, we believe it exhibits all the traits we look for in a quality business. PRMB is one of the largest, if not the largest direct water delivery companies in North America, serving 5 gallon bottled water to consumers and small businesses via a modest monthly subscription or direct exchange. They also own some very attractive consumer retail brands like Mountain Valley and Saratoga Springs. In 2022 PRMB was acquired by Blue Triton Holdings which was the rebranded Nestle Water business and privately held. Blue Triton acquired Primo via a reverse merger, allowing it to go public. The combination created North America’s largest water delivery and consumer retail franchise and potentially $200 million in cost savings, along with noncore asset sales that would clean up the balance sheet. The company delivered on expanding margins with steady topline growth and the market rewarded the company with a much higher valuation, making this one of our better performing stocks in 2023 and 2024. In 2025, the company decided to accelerate the integration and pull forward the cost savings. This proved to be a poor decision and during the summer of 2025 the company faced several logistical challenges with late or missed deliveries and subscription cancellations. This was exacerbated by a tornado that damaged one of their critical bottling plants in Texas. Although unfortunate, the mistakes were nowhere near fatal and new management has been quick to right the ship. However, the stock has been vaporized, erasing two years’ worth of gains.
We believe the business is on track to deliver on all its opportunities from the combination and the current stock price represents an excellent investment opportunity.”
Primo Brands Corporation (NYSE:PRMB) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 64 hedge fund portfolios held Primo Brands Corporation (NYSE:PRMB) at the end of the fourth quarter, up from 62 in the previous quarter. While we acknowledge the risk and potential of Primo Brands Corporation (NYSE:PRMB) 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 Primo Brands Corporation (NYSE:PRMB) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Primo Brands Corporation (NYSE:PRMB) and shared a list of most undervalued stocks to buy and hold for 10 years. 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.
