SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun Small Cap Strategy” second-quarter 2026 investor letter. A copy of the letter can be downloaded here. The second quarter of 2026 was driven by the AI boom and the Iran War, affecting interest rates, oil, commodities, and consumer sentiment. The riskiest market segments performed robustly in the quarter, primarily driven by technology and industrial firms linked to the AI arms race. Some portfolio companies linked to high-value consumer purchases faced pressure but still aligned with positive earnings and trends. The Small Cap Composite returned +10.79% on a gross basis +10.58% net) in the second quarter versus the Russell 2000®, which returned 21.49%, and the Russell 2000® Value, which returned 17.19%, over the same period. The composite returned 27.10% on a gross basis (26.13% net) versus 40.78% and 43.01% for the indexes. The fund underperformed the index due to the underweight position in speculative growth. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, SouthernSun Small Cap Strategy highlighted The Boston Beer Company, Inc. (NYSE:SAM). The Boston Beer Company, Inc. (NYSE:SAM) is an alcoholic beverage company known for its Samuel Adams Boston Lager. On July 23, 2026, The Boston Beer Company, Inc. (NYSE:SAM) closed at $174.51 per share, reflecting a market capitalization of $1.82 billion. The Boston Beer Company, Inc. (NYSE:SAM) posted a one-month return of -9.05%, while its shares lost 18.83% over the past 52 weeks.
SouthernSun Small Cap Strategy stated the following regarding The Boston Beer Company, Inc. (NYSE:SAM) in its Q2 2026 investor update:
“The Boston Beer Company, Inc. (NYSE:SAM), a leading provider of alcoholic beverages, was a bottom contributor in the Small Cap strategy during the second quarter. The company reported a low-single-digit revenue decline for its most recent quarterly results. Weakness in its Twisted Tea and Truly brands more than offset rapid growth from its Sun Cruiser brand, and management modestly lowered its volume guidance for the year. The company also recorded a sizable charge after an adverse jury verdict in a dispute with a former can supplier. Encouragingly, gross margins expanded again year over-year, and SAM’s net cash balance sheet can comfortably absorb the potential legal payment while continuing share repurchases. We continue to believe the company can produce top line growth over the medium to long term, given its strong innovation and distribution capabilities — Sun Cruiser being the latest proof point — and focused management. We also believe the margin gains can be sustained. With the shares trading at an undemanding valuation, we remain confident that management’s efforts to grow the brands, improve operations, and steward the company’s capital will reward patient investors over time.”
The Boston Beer Company, Inc. (NYSE:SAM) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 35 hedge fund portfolios held The Boston Beer Company, Inc. (NYSE:SAM) at the end of the first quarter, compared to 37 in the previous quarter. While we acknowledge the risk and potential of The Boston Beer Company, Inc. (NYSE:SAM) 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 The Boston Beer Company, Inc. (NYSE:SAM) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered The Boston Beer Company, Inc. (NYSE:SAM) and shared Longleaf Partners Small-Cap Fund’s views on the company. In addition, please check out our hedge fund investor letters Q2 2026 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.
