Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund returned 7.48% compared to a 10.15% return for the Russell 2000 Value Index. Year-to-date, the fund returned 8.1% compared to a 9.22% return for the index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
FPA Queens Road Small Cap Value Fund highlighted stocks like Fabrinet (NYSE:FN) in the third quarter 2024 investor letter. Fabrinet (NYSE:FN) offers optical packaging and precision optical, electro-mechanical, and electronic manufacturing services. The one-month return of Fabrinet (NYSE:FN) was 2.32%, and its shares gained 60.23% of their value over the last 52 weeks. On November 8, 2024, Fabrinet (NYSE:FN) stock closed at $271.08 per share with a market capitalization of $9.832 billion.
FPA Queens Road Small Cap Value Fund stated the following regarding Fabrinet (NYSE:FN) in its Q3 2024 investor letter:
“Fabrinet (NYSE:FN) is a contract manufacturer of optical communications components and modules. The company has a dominant position in hard-to-replicate precision-manufacturing technologies and an enviable track record of execution. The majority of Fabrinet’s sales are to networking equipment manufacturers but it has been successfully diversifying into the data center, industrial, auto, and medical end-markets. Fabrinet has been a big beneficiary of the current wave of datacenter investment. The stock took off following June 2023 earnings when datacenter sales increased 50% sequentially and more than 100% over the previous year, driven by their 800-gigabyte transceivers for Artificial Intelligence applications. The company also announced that Nvidia is a 10%+ customer.
Fabrinet was a top-five holding in the Fund before its June 2023 earnings announcement. Since then, the stock has appreciated considerably and we have trimmed in keeping with our risk management policies. Given the growth in forward earnings estimates, Fabrinet trades in line with its historical earnings multiples and remains a top five Fund position.”
An automated assembly line displaying the advanced packaging technology used by the company.
Fabrinet (NYSE:FN) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held Fabrinet (NYSE:FN) at the end of the second quarter which was 33 in the previous quarter. In the fiscal first quarter of 2025, Fabrinet’s (NYSE:FN) revenue was $804 million, increasing 17% from previous year’s quarter. While we acknowledge the potential of Fabrinet (NYSE:FN) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Fabrinet (NYSE:FN) and shared the list of best electronic stocks to buy according to hedge funds. In Q2 2024 investor letter, FPA Queens Road Small Cap Value Fund shared its views on Fabrinet (NYSE:FN). In addition, please check out our hedge fund investor letters Q3 2024 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.