Should You Hold Darling Ingredients (DAR)?

Core Insights - SouthernSun Asset Management's "SouthernSun Small Cap Strategy" reported a gross return of 11.73% for Q3 2025, underperforming the Russell 2000 Index and Russell 2000 Value Index which returned 12.39% and 12.60% respectively [1] - Over the trailing twelve months, the strategy returned -0.66% gross, significantly lower than the 10.76% and 7.88% returns of the respective indexes [1] Company Analysis: Darling Ingredients Inc. (NYSE:DAR) - Darling Ingredients Inc. was highlighted as a significant detractor in the SouthernSun Small Cap Strategy for Q3 2025, having previously been a top contributor in Q2 2025 [2][3] - The company specializes in converting edible by-products and food waste into sustainable products and is a leading renewable energy producer [3] - Over the last 52 weeks, Darling Ingredients' stock has decreased by 17.32%, closing at $32.56 on November 4, 2025, with a market capitalization of $5.151 billion [2] - Despite recent challenges, the company is expected to see improvements in top-line and bottom-line results in 2026 due to fundamental and regulatory changes [3] - The base Food and Feed businesses are providing support for the struggling Fuel business, acting as a natural hedge [3] - Darling Ingredients' vertically integrated supply chain and low-cost position have shown resilience against market headwinds [3] - Operational improvements and an upgraded asset base are anticipated to enhance operating profitability and discretionary cash flow as market conditions improve [3]