Middle Coast Investing is Monitoring Portillo’s (PTLO). Here’s Why

Middle Coast Investing, an investment advisor firm, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The third quarter was favorable for Middle Coast Investing. Its collective portfolio outperformed the S&P 500 and is ahead of benchmarks year to date. In Q3 2025, the US Portfolios returned 9.6% compared to 7.8% for the S&P 500. It’s Core U.S. portfolios returned 10% while the Russell 2000 returned 12%, the S&P 600 returned 8.7% and the Nasdaq generated 11.2% for the same period. Also, its European Portfolios appreciated by 5.5%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Middle Coast Investing highlighted stocks such as Portillo’s Inc. (NASDAQ:PTLO). Portillo’s Inc. (NASDAQ:PTLO) is a US-based restaurant operator. The one-month return of Portillo’s Inc. (NASDAQ:PTLO) was -0.77%, and its shares lost 47.86% of their value over the last 52 weeks. On October 6, 2025, Portillo’s Inc. (NASDAQ:PTLO) stock closed at $6.47 per share, with a market capitalization of $465.229 million.

Middle Coast Investing stated the following regarding Portillo’s Inc. (NASDAQ:PTLO) in its third quarter 2025 investor letter:

“We also got Portillo’s Inc. (NASDAQ:PTLO) wrong, and quickly. The company had a disappointing Q2 report, lowering guidance. But I bought more shares, as the company was sticking to its strategy and its issues – especially getting a foothold with its newer restaurants in Texas – seemed plausible and solvable.

A month later, the company lowered its guidance and changed its strategy, slowing its growth plans. I don’t think that’s a bad move, necessarily, but it shows the company is a bit lost at the moment. Tariffs and inflation are part of the problem; McDonald’s is pressuring other fast-food companies with a value play; and the ICE crackdown on the Hispanic community probably hurts Portillo’s on the margin. But unsteady management is always concerning.

Indeed, a week after we sold half our position for tax losses, Portillo’s announced it was looking for a new CEO. The concept is very profitable, but does it play outside of Peoria and Chicago? I remain intrigued, but we’ll watch with a smaller position for the time being.”

Portillo’s Inc. (NASDAQ:PTLO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 26 hedge fund portfolios held Portillo’s Inc. (NASDAQ:PTLO) at the end of the second quarter, up from 17 in the previous quarter. In the second quarter of 2025, Portillo’s Inc. (NASDAQ:PTLO) reported revenue of $188.5 million, reflecting an increase of $6.6 million compared to Q2 2024.While we acknowledge the risk and potential of Portillo’s Inc. (NASDAQ:PTLO) 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 Portillo’s Inc. (NASDAQ:PTLO) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Portillo’s Inc. (NASDAQ:PTLO) and shared Middle Coast Investing’s views on the company in the previous company. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.