Palm Valley Capital Management, an investment management firm, has issued the second-quarter 2026 investor letter for the “Palm Valley Capital Fund.” A copy of the letter can be downloaded here. In the second quarter, the fund’s investor class gained 1.80%, while the S&P SmallCap 600 rose 19.7% and the Morningstar Small Cap Total Return Index returned 14.0%. The Strategy primarily focused on small-cap categories, allocating 75% to cash equivalents. This led to underperformance relative to benchmarks. The Fund is currently seeking more small-cap opportunities that meet its return criteria and will act swiftly if market conditions improve. The Index benefited from strong contributions from data center construction and biotech sectors, while the energy industry lagged. Additionally, reviewing the fund’s top five holdings can reveal its best investments in 2026.
In its second-quarter 2026 investor letter, Palm Valley Capital Management highlighted TrueBlue, Inc. (NYSE:TBI). TrueBlue, Inc. (NYSE:TBI) is a specialized workforce solutions provider. On July 7, 2026, TrueBlue, Inc. (NYSE:TBI) closed at $8.00 per share, reflecting a market capitalization of $243.2 million. TrueBlue, Inc. (NYSE:TBI) posted a one-month return of 22.14%, while its shares gained 20.66% over the past 52 weeks.
Palm Valley Capital Management stated the following regarding TrueBlue, Inc. (NYSE:TBI) in its Q2 2026 investor letter:
“The Fund’s top contributors in the second quarter were Kelly Services (ticker: KELYA), TrueBlue, Inc. (NYSE:TBI), and Heartland Express (ticker: HTLD). TrueBlue’s stock seems to be reacting to improving demand for industrial staffing, which according to industry associations was growing 10% above the prior year in May, but fell to 2% by mid-June. TrueBlue is participating in the data center boom through significant growth in its energy projects, but the company hasn’t yet converted this into positive earnings. TrueBlue also ended its proxy battle with EHS Investments in April by entering into a cooperation agreement, and the company received (and rejected) another acquisition offer for its PeopleReady segment from competitor HireQuest. While we continue to believe TrueBlue’s profitability will bounce, the company’s poor execution the last few years leaves us cautious about sizing the position.”
TrueBlue, Inc. (NYSE:TBI) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 12 hedge fund portfolios held TrueBlue, Inc. (NYSE:TBI) at the end of the first quarter, compared to 17 in the previous quarter. In Q1 2026,TrueBlue, Inc. (NYSE:TBI) reported revenue of $399 million, marking an 8% year-over-year increase. While we acknowledge the risk and potential of TrueBlue, Inc. (NYSE:TBI) 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 TrueBlue, Inc. (NYSE:TBI) 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 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.
