sankai/iStock via Getty Images The following segment was excerpted from the Atai Capital Management Q3 2025 Letter. The portfolio's top contributor for the quarter was BK Technologies Corp (BKTI) ("BKT"), which is a position I have not mentioned previously, and we'll cover in more detail shortly. Other notable contributors included Bel Fuse (BELFB) and an undisclosed position. Detractors for the quarter consisted of a large undisclosed position and AstroNova (ALOT). As mentioned in prior letters, partn ...

Qarlos Qastilla/iStock via Getty Images Dear Partners, Atai Capital experienced a gain of 10.7% in the third quarter net of all fees. This compares to a 8.1% gain for the S&P 500, a 12.4% gain for the Russell 2000, and a 17.0% gain for the Russell Microcap for the third quarter of 2025. Atai Capital Russell Micro Russell 2000 S&P 500 Q3-2025 10.7% 17.0% 12.4% 8.1% YTD 43.3% 15.7% 10.4% 14.8% Since Inception 84.0% 43.9% 44.0% 81.3% Annualized 24.9% 14.2% 14.2% 24.2% While I am pleased that w ...

Core Insights - Merion Road Capital Management reported a 5.0% return for its Small Cap Fund in Q3 2025, underperforming the Russell 2000 Index which returned 12.4% [1] - The long-only portfolio achieved a 10.1% return, outperforming the S&P 500's 8.1% return, primarily driven by the strong performance of Kratos [1] Company Highlights - Bel Fuse Inc. (NASDAQ:BELFB) is noted for its design, manufacturing, marketing, and sales of products that power, protect, and connect electronic circuits [2] - The stock of Bel Fuse Inc. had a one-month return of 0.15% and a remarkable 93.40% increase in value over the past 52 weeks, closing at $152.69 per share with a market capitalization of $1.933 billion on November 26, 2025 [2] - Merion Road Capital established a capital structure arbitrage in Bel Fuse, noting a significant widening of the price discount between Class A and Class B shares, approaching historic levels [3] - The investment in Bel Fuse was initially based on improved management and the successful acquisition of Enercon, which led to strong Q2 results [3] - Gabelli, a major holder of Class A shares, is considering resubmitting a shareholder proposal to collapse the share structure [3]

Core Insights - Kimball Electronics (KE) and Bel Fuse (BELFB) are both stocks in the Electronics - Miscellaneous Products sector that are currently attracting investor interest [1] - Both companies hold a Zacks Rank of 1 (Strong Buy), indicating positive earnings estimate revisions and improving earnings outlooks [3][4] Valuation Metrics - KE has a forward P/E ratio of 21.65, while BELFB has a forward P/E of 22.61, suggesting KE may be more attractively priced [5] - KE's PEG ratio is 1.08, compared to BELFB's PEG ratio of 1.51, indicating KE's expected earnings growth is more favorable relative to its price [5] - KE's P/B ratio is 1.24, significantly lower than BELFB's P/B of 4.55, further supporting KE's valuation advantage [6] Value Grades - KE has earned a Value grade of A, while BELFB has received a Value grade of D, highlighting KE as the superior value option based on traditional valuation metrics [6][7]

Core Insights - Bel Fuse (BELFB) has shown significant international revenue trends that are crucial for assessing its financial resilience and growth prospects [1][2][3] Revenue Performance - The total revenue for Bel Fuse in the quarter ending September 2025 was $178.98 million, reflecting a 44.8% increase [4] - Europe generated $25.03 million, accounting for 14% of total revenue, which was a decline of 27.45% compared to the projected $34.5 million [5] - Asia contributed $33.65 million, representing 18.8% of total revenue, exceeding the consensus estimate of $17.2 million by 95.62% [6] Future Projections - For the current fiscal quarter, total revenue is projected to reach $170.1 million, a 13.5% increase from the same quarter last year, with Europe and Asia each expected to contribute 14.2% or $24.2 million [7] - For the full year, total revenue is anticipated to be $669.44 million, up 25.2% from the previous year, with Europe and Asia expected to account for 12.9% ($86.12 million) and 11.6% ($77.47 million) of total revenue, respectively [8] Market Dynamics - The reliance on international markets presents both opportunities and challenges for Bel Fuse, making the analysis of international revenue trends essential for forecasting future performance [9][10] Stock Performance - Over the past month, Bel Fuse's stock has increased by 12.1%, outperforming the S&P 500 composite, which decreased by 0.2% [13] - In the last three months, the company's shares rose by 21.2%, compared to a 6.3% increase in the S&P 500 [13]

Core Viewpoint - Bel Fuse (BELFB) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of stocks, leading to significant price movements when estimates are revised [4]. Business Outlook for Bel Fuse - The upgrade in Zacks Rank suggests an improvement in Bel Fuse's underlying business, which could lead to an increase in stock price as investors respond positively to this trend [5][10]. - For the fiscal year ending December 2025, Bel Fuse is expected to earn $6.80 per share, with a 17.4% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions and potential for market-beating returns [9][10].

Core Insights - The analyst has refrained from recommending a Buy on Bel Fuse Inc. (BELFB) stock until a clear inflection point indicating the company's recovery is observed [1] Group 1: Company Overview - Bel Fuse Inc. is being closely monitored for signs of recovery before investment recommendations are made [1] Group 2: Analyst Background - The analyst has a background in petroleum and gas engineering and has transitioned into finance, focusing on technology, infrastructure, and internet services [1]

Revenue Breakdown - For the nine months ended September 30, 2025, 53% of revenues were derived from Power Solutions and Protection, 34% from Connectivity Solutions, and 13% from Magnetic Solutions [115]. - Sales of Power Solutions and Protection products increased by $45.7 million (93.9%) in Q3 2025 compared to Q3 2024, driven by aerospace and defense applications [123]. - Connectivity Solutions sales rose by $6.2 million (11.0%) in Q3 2025, primarily due to higher volumes in commercial aerospace applications, which grew by $6.3 million (50.5%) [124]. - Sales of Magnetic Solutions products increased by $3.5 million (18.0%) in Q3 2025, driven by higher demand from networking customers [127]. Order Backlog - The backlog of orders amounted to $415 million at September 30, 2025, an increase of $33 million, or 9%, from December 31, 2024 [118]. Labor Costs - Labor costs represented 7.8% of revenue during the first nine months of 2025, remaining flat compared to the same period in 2024 [121]. - Minimum wage increases in 2025 are expected to increase annual labor costs by $1.8 million, though these costs have been largely offset by revenue increases [121]. Taxation - The effective tax rate will fluctuate based on geographic regions, with Asia having the lowest tax rates among the regions where the company operates [121]. - The provision for income taxes increased to $5.4 million in Q3 2025 from $3.1 million in Q3 2024, with an effective tax rate of 19.5% [138]. Foreign Exchange and Tariffs - The company recognized a foreign exchange transactional gain of $11.6 million during the nine months ended September 30, 2025, mainly due to currency fluctuations [121]. - Approximately 75% of global sales are not currently subject to newly-enacted U.S. tariffs, with 25% estimated to be affected, primarily from the PRC and Israel [121]. Material and Production Costs - Material costs as a percentage of sales increased to 32.2% in Q3 2025 from 31.7% in Q3 2024, driven by higher sales of Power products [129]. - The Company utilizes metals such as copper, zinc, tin, gold, and silver in production, with price fluctuations potentially leading to higher production costs [148]. - The Company believes it has adequate primary and secondary sources for key materials despite potential volatility in metal prices [148]. - The Company actively monitors risks associated with commodity price fluctuations and anticipates increased material costs [148]. - Strategies implemented to mitigate negative impacts from price changes include price adjustments and productivity improvements [148]. Financial Performance - Total cost of sales decreased to 60.3% in Q3 2025 from 63.9% in Q3 2024, reflecting improved sales volumes [129]. - R&D expenses rose to $7.5 million in Q3 2025 from $5.4 million in Q3 2024, primarily due to Enercon's R&D costs [131]. - SG&A expenses increased to $32.8 million in Q3 2025 from $26.7 million in Q3 2024, largely driven by Enercon's SG&A expenses [132]. - Interest expenses surged to $3.6 million in Q3 2025 from $0.4 million in Q3 2024, reflecting higher borrowings related to the Enercon acquisition [133]. - Other income (expense), net improved to $1.1 million in Q3 2025 from a loss of $1.3 million in Q3 2024, driven by reduced foreign exchange losses [135]. Cash Flow and Liquidity - Cash and cash equivalents decreased by $10.5 million during the nine months ended September 30, 2025, primarily due to increased accounts receivable [140]. - The company had $175 million of available borrowings under its revolving credit facility as of September 30, 2025 [143]. - The current ratio improved to 3.1 to 1 at September 30, 2025, compared to 2.9 to 1 at December 31, 2024 [141]. Market Risks - The Company is exposed to market risk from foreign currency exchange rates, interest rates on long-term debt, and commodity price fluctuations [148]. - The Company uses foreign currency forward contracts to manage short-term exposure to operational cash flow fluctuations [148]. - To mitigate variable interest rate risks, the Company maintains two pay-fixed, receive-variable interest rate swap agreements [148]. - There have been no material changes regarding market risk during the nine months ended September 30, 2025 [148]. - Further discussions on market risks can be found in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 [148].

Core Insights - Bel Fuse reported revenue of $178.98 million for the quarter ended September 2025, marking a 44.8% increase year-over-year [1] - The earnings per share (EPS) for the quarter was $2.09, up from $0.92 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $170.43 million by 5.02% [1] - The EPS also surpassed the consensus estimate of $1.68 by 24.4% [1] Revenue Breakdown - Power Solutions and Protection segment generated net sales of $94.41 million, exceeding the two-analyst average estimate of $89.55 million, with a year-over-year increase of 93.9% [4] - Magnetic Solutions segment reported net sales of $22.7 million, slightly below the two-analyst average estimate of $25 million, reflecting an 18% year-over-year increase [4] - Connectivity Solutions segment achieved net sales of $61.87 million, surpassing the average estimate of $58.1 million based on two analysts, with an 11.1% year-over-year change [4] Stock Performance - Bel Fuse shares have returned +9.8% over the past month, outperforming the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Insights - Bel Fuse (BELFB) reported quarterly earnings of $2.09 per share, exceeding the Zacks Consensus Estimate of $1.68 per share, and showing a significant increase from $0.92 per share a year ago, resulting in an earnings surprise of +24.40% [1] - The company achieved revenues of $178.98 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 5.02% and up from $123.64 million year-over-year [2] - Bel Fuse's stock has increased approximately 87.7% since the beginning of the year, significantly outperforming the S&P 500's gain of 17.2% [3] Earnings Outlook - The future performance of Bel Fuse's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - The current consensus EPS estimate for the upcoming quarter is $1.55 on revenues of $161.27 million, and for the current fiscal year, it is $6.25 on revenues of $652.08 million [7] Industry Context - The Electronics - Miscellaneous Products industry, to which Bel Fuse belongs, is currently ranked in the top 20% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]