Palm Valley Capital Management, an investment management firm, has issued the first-quarter 2026 investor letter for the ”Palm Valley Capital Fund.” A copy of the letter is available to download here. In the first quarter, the fund gained 0.74%, while the S&P SmallCap 600 rose 3.51%, and the Morningstar Small Cap Total Return Index saw no change. Initially, small caps surged, with the S&P 600 achieving nearly a 10% year-to-date increase by mid-February. However, shares later declined due to the Iran war and its effects on energy prices. The letter also explored how technology influences the workplace and employment. Additionally, reviewing the fund’s top five holdings can reveal its best investments in 2026.
In its first-quarter 2026 investor letter, Palm Valley Capital Fund highlighted Kelly Services, Inc. (NASDAQ:KELYA). Kelly Services, Inc. (NASDAQ:KELYA) is a staffing and workforce solutions company headquartered in Troy, Michigan. On April 8, 2026, Kelly Services, Inc. (NASDAQ:KELYA) closed at $8.68 per share. One-month return of Kelly Services, Inc. (NASDAQ:KELYA) was -0.92%, and its shares lost 25.81% over the past 52 weeks. Kelly Services, Inc. (NASDAQ:KELYA) has a market capitalization of $296.956 million.
Palm Valley Capital Fund stated the following regarding Kelly Services, Inc. (NASDAQ:KELYA) in its Q1 2026 investor letter:
“Several of our names have catalysts that could help close their valuation gap, although the market has not yet responded favorably. Staffer Kelly Services, Inc. (NASDAQ:KELYA) has a new, motivated controlling shareholder who in January 2026 paid over 4x the current price of the nonvoting stock for its stake. At Palm Valley, we have never insisted on a catalyst to acquire an undervalued name, but we do view them as a bonus.”
Kelly Services, Inc. (NASDAQ:KELYA) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 20 hedge fund portfolios held Kelly Services, Inc. (NASDAQ:KELYA) at the end of the fourth quarter, compared to 21 in the previous quarter. While we acknowledge the risk and potential of Kelly Services, Inc. (NASDAQ:KELYA) 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 Kelly Services, Inc. (NASDAQ:KELYA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Kelly Services, Inc. (NASDAQ:KELYA) and shared Palm Valley Capital Fund’s views on the company in Q4 2025. 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.
