Palm Valley Capital Management, an investment management firm, has released the “Palm Valley Capital Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, Palm Valley Capital Fund appreciated 0.66% compared to a 1.70% gain for the S&P SmallCap 600 and a 3.12% rise in the Morningstar Small Cap Total Return Index. At the beginning of the quarter, the Fund allocated 74.1% to Treasury bills and increased to 76.3% by the end of the quarter. The equity holdings of the Fund rose by 1.12% over the past three months (excluding the effects of fund operating expenses). The performance of equities was positively influenced by the investments in precious metals, particularly as silver has been the Fund’s largest allocation for the past few years. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Palm Valley Capital Fund highlighted stocks such as Ingredion Incorporated (NYSE:INGR). Ingredion Incorporated (NYSE:INGR) is a food and beverage ingredients manufacturer. The one-month return for Ingredion Incorporated (NYSE:INGR) was 3.89%, and its shares lost 16.81% over the last 52 weeks. On January 5, 2026, Ingredion Incorporated (NYSE:INGR) stock closed at $110.41 per share, with a market capitalization of $7.086 billion.
Palm Valley Capital Fund stated the following regarding Ingredion Incorporated (NYSE:INGR) in its fourth quarter 2025 investor letter:
“During the fourth quarter, we bought three new positions: Domino’s Pizza Group plc (ticker: DOM LN), Utz Brands (ticker: UTZ), and Ingredion Incorporated (NYSE:INGR). As has been the case for several years, our initial weightings in new names have been fairly modest because most of them were just reaching our minimum required discount.
Ingredion produces food and beverage ingredients, which are primarily starches and sweeteners, and it also serves other markets including animal feed, paper, pharmaceutical, beauty, and home. The firm was founded in 1906. A typical American might use products impacted by Ingredion two to three dozen times daily. Ingredion is a mature company, with its core business growing at low single-digit rates. In developed markets, the food industry is currently challenged by weak volumes. Ingredion also faces a headwind because 10% of its sales comes from high fructose corn syrup, which contributes to obesity and is experiencing annual declines of 1% to 2% each year. Furthermore, in the third quarter, the firm’s production hadn’t fully recovered from a June fire at its large Chicago plant.
The company is driving growth by producing modified ingredients that serve specialty markets and address wellness trends, like reducing sugar content or enhancing protein while preserving texture. Ingredion has a strong presence in emerging markets, particularly Latin America. Additionally, the company has succeeded in reducing its earnings exposure to price fluctuations for corn, its primary raw material, by using hedging more adroitly. Ingredion has significantly improved its balance sheet and recently traded at its lowest valuation multiple since the lockdowns. We believe our purchase of Ingredion offers exposure to a proven business with limited cyclicality trading at 10x earnings and paying a 3% dividend yield.”
Ingredion Incorporated (NYSE:INGR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 29 hedge fund portfolios held Ingredion Incorporated (NYSE:INGR) at the end of the third quarter, compared to 34 in the previous quarter. In Q3 2025, Ingredion Incorporated (NYSE:INGR) reported net sales of $1.8 billion, marking a decrease of 3% compared to prior year. While we acknowledge the risk and potential of Ingredion Incorporated (NYSE:INGR) 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 Ingredion Incorporated (NYSE:INGR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Ingredion Incorporated (NYSE:INGR) and shared the list of some of the best overlooked stocks to buy. In addition, please check out our hedge fund investor letters Q4 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.
