Core Insights - Palm Valley Capital Fund reported a 2.35% appreciation in Q3 2025, underperforming the S&P SmallCap 600's 9.11% gain and the Morningstar Small Cap Total Return Index's 7.99% rise [1] - The Fund's cash equivalents increased from 73.5% to 74.1% during the quarter, reflecting a cautious investment strategy [1] - Small-cap stocks outperformed large caps due to expectations of Federal Reserve easing and reduced tariff concerns impacting corporate profits [1] Company Focus: Avista Corporation (NYSE:AVA) - Avista Corporation, a utility company, had a one-month return of 3.17% and a 52-week loss of 0.08%, with a market capitalization of $3.032 billion as of October 7, 2025 [2] - The Fund initiated a small position in Avista after a disappointing earnings report and stock price decline, believing the core utility business remains strong despite impairments in clean energy investments [3] - Avista is currently valued at 14 times expected earnings, 1.2 times tangible book value, and offers a 5.2% dividend yield, indicating an attractive investment opportunity [3] Hedge Fund Interest - Avista Corporation was held by 27 hedge fund portfolios at the end of Q2 2025, a decrease from 30 in the previous quarter, suggesting a decline in popularity among hedge funds [4] - While Avista is recognized for its potential, the company is viewed as less favorable compared to certain AI stocks that are believed to offer greater upside potential and lower downside risk [4]