Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” Q3 2026 investor letter. A copy of the letter can be downloaded here. The Fund returned -7.62% in the third quarter of 2026, underperforming the Russell 2000 Value Index, which fell 4.91%. However, the Fund’s year-to-date return of 17.35% exceeded the benchmark’s 16.96%. Portfolio managers attributed the quarterly underperformance primarily to the Fund’s lack of exposure to Energy and Healthcare, and weakness in consumer discretionary holdings. They noted that recent small-cap gains had been driven largely by speculative stocks, including loss-making companies and biotechnology businesses, while profitable small-cap companies continued to trade at attractive valuations relative to larger peers. During the quarter, the fund reduced its exposure to appreciated technology stocks and invested in established businesses with sound fundamentals and reasonable valuations. Looking ahead, the managers acknowledged continued market volatility but remained confident in the Fund’s long-term prospects, emphasizing that discipline, patience, and a focus on business fundamentals would help the portfolio navigate speculative market conditions. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its third-quarter 2026 investor letter, FPA Queens Road Small Cap Value Fund highlighted stocks like Simpson Manufacturing Co., Inc. (NYSE:SSD). Simpson Manufacturing, Inc. (NYSE:SSD) has a dominant position in the market for trusses, connectors, fasteners, anchors, and other products used in residential housing construction. The one-month return of Simpson Manufacturing Co., Inc. (NYSE:SSD) was 15.84% while its shares traded between $156.32 and $213.49 over the last 52 weeks. On October 30, 2026, Simpson Manufacturing Co., Inc. (NYSE:SSD) stock closed at approximately $193.34 per share, with a market capitalization of about $8.19 billion.
FPA Queens Road Small Cap Value Fund stated the following regarding Simpson Manufacturing Co., Inc. (NYSE:SSD) in its Q3 2026 investor letter:
“Simpson Manufacturing Co., Inc. (NYSE:SSD) has a dominant position selling trusses, connectors, fasteners, anchors, and other products used in residential housing construction. The company has an exceptional history of market share gains while extending its franchise into new products and geographies.”
Why FPA Queens Road Small Cap Value Fund Added Simpson Manufacturing Co. (SSD) to Its Portfolio
Simpson Manufacturing Co., Inc. (NYSE:SSD) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 31 hedge fund portfolios held Simpson Manufacturing Co., Inc. (NYSE:SSD) at the end of the second quarter, which was 25 in the previous quarter. While we acknowledge the risk and potential of Simpson Manufacturing Co., Inc. (NYSE:SSD) 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’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.