Buckley Capital Advisors, an investment management company, released its first quarter 2026 investor letter. A copy of the letter can be downloaded here. The first quarter of 2026 presented some difficulties for small and mid-cap equities. However, the Fund observed a notable performance improvement in April, with the portfolio rising approximately 13.8% net month-to-date and 8.6% net year-to-date, showcasing robust underlying performance in several of its core positions as fundamentals started to take hold. This strong performance trend has continued into May. This letter reflects the firm’s strategy of investing in high-quality companies trading at significantly discounted valuations. In addition, please check the firm’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Buckley Capital highlighted stocks like Sezzle Inc. (NASDAQ:SEZL). Sezzle Inc. (NASDAQ:SEZL) is a US based financial technology company that offers a buy now, pay later solution for consumers. On May 29, 2026, Sezzle Inc. (NASDAQ:SEZL) closed at $118.15 per share. One-month return of Sezzle Inc. (NASDAQ:SEZL) was 37.45%, and its shares gained 5.00% over the past 52 weeks. Sezzle Inc. (NASDAQ:SEZL) has a market capitalization of $3.97 billion.
Buckley Capital stated the following regarding Sezzle Inc. (NASDAQ:SEZL) in its Q1 2026 investor letter:
“Sezzle Inc. (NASDAQ:SEZL) is a mispriced buy now pay later (BNPL) business that we believe will earn approximately $5.20/share in earnings this year and $7.00/share next year, vs. our purchase price of $66/share. We believe paying 12.7x this year’s and less than 10x next year’s earnings is highly attractive for a business that can compound earnings at a 20%+ clip with a long growth runway.
The BNPL space is growing at 20% per year, and SEZL has the best business model within the industry. While its stock is highly sensitive to market perceptions around consumer credit, given how quickly the company’s book turns over, it can easily pull back on credit or tighten its lending standards (as it did in Q4 2025, for example) and see meaningful improvements in credit performance. This makes Sezzle a much lower-risk business model from a credit standpoint than its stock volatility would imply, and a very high-quality business given how quickly it is able to grow and the growth runway ahead of it.
Historically, Sezzle has traded for closer to 20-25x forward earnings, and we believe the IRR will be north of 25% given earnings growth combined with multiple expansion. We also believe the company is being very conservative with its financial guidance and is likely to exceed consensus expectations.”
Sezzle Inc. (NASDAQ:SEZL) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 25 hedge fund portfolios held Sezzle Inc. (NASDAQ:SEZL) at the end of the first quarter, up from 23 in the previous quarter. While we acknowledge the risk and potential of Sezzle Inc. (NASDAQ:SEZL) 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 Sezzle Inc. (NASDAQ:SEZL) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Sezzle Inc. (NASDAQ:SEZL) and shared a bullish thesis on the company. In addition, please check out our hedge fund investor letters Q1 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.
