SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun Small Cap Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the strategy returned -11.32% on a gross basis (-11.48% net) compared to a -9.48% return for the Russell 2000 Index and -7.74% for the Russell 2000 Value Index. The strategy returned -12.55% on a gross basis (-13.21% net) for the trailing twelve months compared to -4.01% and -3.12% respectively for the indexes over the same period. In addition, please check the top 5 holdings of the strategy to know its best pick in 2025.
In its first-quarter 2025 investor letter, SouthernSun Small Cap Strategy highlighted stocks such as Enerpac Tool Group Corp. (NYSE:EPAC). Enerpac Tool Group Corp. (NYSE:EPAC) provides a wide range of industrial products and solutions. The one-month return of Enerpac Tool Group Corp. (NYSE:EPAC) was -10.32%, and its shares gained 10.70% of their value over the last 52 weeks. On April 25, 2025, Enerpac Tool Group Corp. (NYSE:EPAC) stock closed at $40.23 per share with a market capitalization of $2.176 billion.
SouthernSun Small Cap Strategy stated the following regarding Enerpac Tool Group Corp. (NYSE:EPAC) in its Q1 2025 investor letter:
“Enerpac Tool Group Corp. (NYSE:EPAC) was the top contributor in the Small Cap strategy. This management team, led by CEO Paul Sternlieb, has done an excellent job improving profitability since he took the position 4 years ago. Over the past three years, EBITDA per share has grown at a 24% compounded rate. Leadership has begun to put more focus on commercial effectiveness and excellence, and they are beginning to see results, evidenced by recent organic growth. Also, many of EPAC’s products are used in infrastructure construction, and they are finally beginning to see meaningful project activity in U.S. infrastructure which could help their sales in the coming quarters. In our opinion, the keys to success going forward are continued commercial and operational execution and how they will use the cash generated from this high margin business. The company continues to evaluate bolt-on M&A candidates; but, in the absence of good M&A targets, we will look for continued share buybacks.”
A skilled engineer working on a newly developed hydraulic tool with a view of the factory floor.
Enerpac Tool Group Corp. (NYSE:EPAC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 16 hedge fund portfolios held Enerpac Tool Group Corp. (NYSE:EPAC) at the end of the fourth quarter, compared to 18 in the third quarter. Enerpac Tool Group Corp.’s (NYSE:EPAC) revenue for the fiscal second quarter of 2025 increased 5.1%. While we acknowledge the potential of Enerpac Tool Group Corp. (NYSE:EPAC) 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 addition, please check out our hedge fund investor letters Q1 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.