Long Cast Advisers, an investment management firm, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund’s cumulative net returns improved 4%. The fund returned a cumulative 266% net of fees, or 14% CAGR, since its inception in November 2015 through the quarter-end of Q3 2025. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its third-quarter 2025 investor letter, Long Cast Advisers highlighted stocks such as Pro-Dex, Inc. (NASDAQ:PDEX). Pro-Dex, Inc. (NASDAQ:PDEX) is a leading powered surgical instruments manufacturing company for medical device original equipment manufacturers. The one-month return of Pro-Dex, Inc. (NASDAQ:PDEX) was 1.50%, and its shares lost 25.65% of their value over the last 52 weeks. On November 28, 2025, Pro-Dex, Inc. (NASDAQ:PDEX) stock closed at $36.44 per share, with a market capitalization of $119.523 million.
Long Cast Advisers stated the following regarding Pro-Dex, Inc. (NASDAQ:PDEX) in its third quarter 2025 investor letter:
“Pro-Dex, Inc. (NASDAQ:PDEX) issued a mid-September press release after a significant and unexplained decline in the stock that basically said: “Please be aware we aren’t the blockchain platform that trades under the same ticker in the crypto markets.” Then it added a new risk disclosure in its 10Q “AI-errors could be bad for the stock” and indicated that a litigation-focused law firm issued an AI-generated press release based on two year old news and stale financial data to solicit shareholders for a potential class action.
From the ridiculous to the sublime, the same 10Q indicated a raft of positive news: The company is negotiating and anticipates a contract renewal with its largest client; it is concurrently pursuing an acquisition of an existing supplier “to help meet the expected increased demand currently being contemplated by our largest customer”; it is launching its own self-branded product in the CMT and thoracic verticals; it affirmed that its 2017 exclusive supply agreement with robotics startup Monogram will transfer to Zimmer Biomet, which acquired Monogram in October; and it detailed the gains it will book next quarter and possibly in the future if Monogram meets performance hurdles through 2030 (Monogram was founded by a former engineer from PDEX, which owned roughly 2M shares).
We have been invested in PDEX for several years. It is a manufacturer niche contract with a software embedded surgical tool for driving screws without stripping. It has a long history of incremental improvement, value creation, a raft of tailwinds and fewer than 4M shares outstanding, which they typically buy back opportunistically. I recently attended the shareholder meeting and appreciate the company’s incremental approach to long term strategic investment and value creation. Most compelling of all is our purchase price; in the low-$30’s it is trading at 8x trailing EBITDA and more than 50% below its 52-week high. With a depressed stock and catalysts on the horizon, my confidence in its likelihood of becoming a five year double warrants a concentrated position. It is now a top-five holding.”
Pro-Dex, Inc. (NASDAQ:PDEX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 2 hedge fund portfolios held Pro-Dex, Inc. (NASDAQ:PDEX) at the end of the third quarter, which was 4 in the previous quarter. While we acknowledge the risk and potential of Pro-Dex, Inc. (NASDAQ:PDEX) 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 Pro-Dex, Inc. (NASDAQ:PDEX) 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.
