Group 1: Fund Performance - The FPA Queens Road Small Cap Value Fund returned 7.46% in Q3 2025, underperforming the Russell 2000 Value Index which returned 12.60% [1] - For the first three quarters of 2025, the fund achieved a return of 13.77%, outperforming the index's return of 9.04% [1] Group 2: Fabrinet Overview - Fabrinet (NYSE:FN) specializes in optical packaging and precision manufacturing services, with a one-month return of -4.85% and a 52-week gain of 76.79% [2] - As of November 24, 2025, Fabrinet's stock closed at $462.67 per share, with a market capitalization of $16.576 billion [2] Group 3: Fabrinet's Market Position - Fabrinet dominates its niche in optical networking equipment and has shown impressive historical revenue growth and increasing operating margins [3] - The company has a significant customer in Nvidia, which accounts for 10% of its revenue, and has seen its stock price double since April due to rising expectations for data center spending [3] - Fabrinet is expected to continue being a "compounder" in the market, with ongoing demand for high bandwidth networking [3] Group 4: Revenue and Hedge Fund Interest - Fabrinet generated $978 million in revenue for fiscal Q1 2026, marking a 22% year-over-year increase and an 8% increase from the previous quarter [4] - The number of hedge funds holding Fabrinet decreased from 38 to 32 from the previous quarter [4]

Core Viewpoint - Zetwerk Pvt, an Indian contract manufacturer, is preparing for an initial public offering (IPO) that may raise up to $750 million, indicating strong interest in the Indian IPO market [1][2]. Company Overview - Zetwerk specializes in manufacturing fabricated metal products and serves clients across various sectors, including aerospace components, consumer electronics, and capital goods [4]. IPO Details - The company is likely to file a draft prospectus early next year through a confidential route, with the offering expected to include a mix of new and existing shares, primarily consisting of a fresh issue [2]. - The IPO is part of a broader trend in India's booming IPO market, where companies have raised approximately $19.5 billion so far this year, following a record $21 billion in 2024 [3]. Underwriters - Zetwerk has mandated several financial institutions, including Kotak Mahindra Capital Co., JM Financial Services Ltd., Avendus Capital Pvt., and the Indian units of HSBC Holdings Plc, Morgan Stanley, and Goldman Sachs Group Inc. to manage the share sale [1].

IPO Plans - Zetwerk Pvt, an Indian contract manufacturer, is preparing for an initial public offering (IPO) [1] - The IPO may raise as much as $750 million [1]

Group 1 - Celestica Inc. has transitioned from being a contract manufacturer to a design-centric platform integrator, focusing on key control points in AI data centers such as high-bandwidth switching, compute, storage, and rack-scale integration [1] - The company's hardware platform portfolio is expanding, indicating a strategic shift towards more integrated solutions in the AI sector [1] Group 2 - The article highlights the importance of expertise in AI and machine learning, suggesting that professionals in the field are increasingly pursuing advanced certifications to enhance their knowledge and skills [1]

Core Insights - Celestica has transitioned from being a contract manufacturer to a design-centric platform integrator, focusing on key control points in AI data centers [1] - The company is expanding its hardware platform portfolio and enhancing its regional rack-build capabilities [1] Company Overview - Celestica is now involved in high-bandwidth switching, compute, storage, and rack-scale integration within AI data centers [1] - The company is recognized as an "AWS Certified AI Practitioner Early Adopter," indicating its commitment to advanced AI and machine learning technologies [1] Industry Position - The shift towards a design-centric model positions Celestica favorably in the growing AI data center market, which is increasingly reliant on integrated hardware solutions [1] - The expansion of its capabilities aligns with industry trends towards more sophisticated AI applications and infrastructure [1]

Kimball Electronics Conference Call Summary Company Overview - **Company**: Kimball Electronics (NasdaqGS:KE) - **Industry**: Electronic Manufacturing Services (EMS) and Contract Manufacturing Organization (CMO) focused on medical devices, automotive, and industrial sectors - **Headquarters**: Jasper, Indiana, with global operations in Asia (Thailand, Nanjing, China), Europe (Romania, Poland), and North America [4][6] Key Financials - **Revenue**: Approximately $1.5 billion in fiscal 2025 [5] - **Medical Segment**: Represents 27% of total revenue, with expectations for significant growth [48] Strategic Focus - **Core Business**: Emphasis on complex, high-quality products with stringent regulatory requirements, particularly in the medical sector [4][12] - **Growth Strategy**: Focus on expanding the medical CMO space, leveraging cash flow from automotive and industrial sectors to reinvest in medical [7][12] - **Recent Performance**: Double-digit growth in the medical segment for the last three quarters, with expectations for continued strong growth [12][13] Market Position and Competitive Advantages - **Quality Standards**: FDA qualified with a 99.999% quality expectation, differentiating Kimball in the medical CMO space [13] - **Customer Relationships**: 75% of customers have been with Kimball for over a decade, indicating strong long-term partnerships [14] - **Flexibility and Responsiveness**: High marks for flexibility and senior management attention to customer needs [14] Product and Service Offerings - **Medical Products**: Focus on respiratory care, drug delivery systems, surgical devices, and patient monitoring equipment [25][27] - **Manufacturing Capabilities**: Transitioning to higher-level assembly, with over half of medical products now involving full assembly [27] Future Growth Opportunities - **Facility Expansion**: New facility in Indianapolis aimed at increasing capacity for medical device production, with potential for further expansion [11][16] - **Inorganic Growth**: Actively considering mergers and acquisitions to enhance capabilities and market reach, particularly in the medical CMO space [17][41] - **Market Trends**: Observing a trend towards outsourcing manufacturing in the medtech and pharmaceutical sectors, which could benefit Kimball [70][71] Customer Insights - **Major Client**: Long-term partnership with Philips, serving multiple business units and adapting to their needs amid regulatory challenges [50][55] - **Geographic Growth**: Medical business growth is split between North America, Asia, and Europe, with robust performance in Asia and Europe [57][58] Conclusion - **Investment Potential**: Kimball Electronics is positioned for significant growth in the medical sector, supported by strong customer relationships, a focus on quality, and strategic investments in new facilities and capabilities [12][14][67]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 totaled $30.5 million, representing a 2.9% decrease from $31.4 million in Q3 2024 [9] - Gross profit for Q3 2025 was $5 million, or 16.5% of net sales, compared to $3.8 million, or 12.2% of net sales in the same prior year quarter [10][11] - Adjusted EBITDA for Q3 2025 was $1.3 million, significantly up from $143,000 in Q3 2024, reflecting improved efficiencies and productivity [17] Business Line Data and Key Metrics Changes - Aerospace and defense net sales decreased by $1.4 million due to increased production in the latter half of 2024 and delays in product approvals [9] - Medical imaging net sales increased by 8.7% or $832,000 compared to the same quarter in 2024, driven by the transfer of customer programs [10] Market Data and Key Metrics Changes - Customer backlog was $77.3 million as of September 30, 2025, consistent with the backlog at June 30, 2025 [10] - The company is well-positioned in North America, particularly with its Monterrey operations under the USMCA framework, reducing exposure to tariffs [4] Company Strategy and Development Direction - The company is focused on strengthening its balance sheet and reducing inventory investments in 2025 [19] - Investments in regulatory capabilities have been made to leverage future growth, including achieving AS 9100D and CMMC 2.0 certifications [5][19] - The strategic plan emphasizes engineering expertise, product innovation, and sustainability, particularly in fiber optic technology [20][23] Management Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about positioning in the nearshoring landscape and the potential for continued sales momentum in 2025 and beyond [26] - The company believes it has overcome revenue and earning headwinds from changes in customer ordering patterns and delays in aerospace and defense programs [18] Other Important Information - The company incurred a net loss of $146,000 in Q3 2025 due to increased income tax expenses [12] - Cash flow increased to $1.3 million as of September 30, 2025, up from $916,000 at the end of 2024 [15] Q&A Session Summary - There were no questions from the line during the Q&A session [27]

Core Viewpoint - Mayville Engineering Company, Inc. (MEC) is navigating financial challenges while pursuing strategic growth through acquisitions, with mixed analyst sentiments regarding its valuation and future performance [2][4][5]. Group 1: Company Overview - MEC is a contract manufacturer based in Mayville, Wisconsin, founded in 1945, serving industries such as commercial vehicles, construction, agriculture, and military [1]. - The company offers services including prototyping, tooling, production fabrication, coating, assembly, and aftermarket components [1]. Group 2: Financial Performance - The consensus price target for MEC has remained stable at $24, while Citigroup has set a lower target of $18, indicating differing analyst perspectives on the company's outlook [2][6]. - MEC's upcoming third-quarter 2025 earnings report is expected to show earnings of $0.05 per share and revenue of approximately $141 million, following a second-quarter report with an adjusted net income of $2.1 million and an adjusted diluted EPS of $0.10 [3][6]. - Despite these figures, the company reported a GAAP net loss of $1.1 million, reflecting ongoing financial pressures [3]. Group 3: Strategic Initiatives - The acquisition of Accu-Fab is a strategic move aimed at enhancing MEC's long-term growth prospects and is expected to contribute high-margin EBITDA to offset weaknesses in the legacy business [4]. - MEC faces short-term challenges, including soft demand in end markets, elevated interest rates, and geopolitical factors [4]. Group 4: Market Position and Analyst Sentiment - MEC is considered undervalued compared to its industry peers, supporting a "Strong Buy" rating from analysts [5]. - Analysts emphasize the importance of monitoring earnings estimates and revisions as the company navigates its current hurdles [5].

Core Insights - Celestica Inc. (NYSE:CLS) is highlighted as a significant player in the AI ecosystem, particularly due to its partnership with Broadcom, which positions it favorably in the market [2] - Jim Cramer emphasizes that the perception of AI demand as "zero sum" is misguided, suggesting that there is ample opportunity for multiple companies to thrive in this space [2] - Celestica's stock has seen a remarkable increase of approximately 270-280%, indicating strong market performance and investor interest [2] Company Overview - Celestica Inc. provides contract manufacturing, supply chain, and various services to businesses, making it a key player in the technology supply chain [2] - The company is recognized as a preferred partner for Broadcom, which enhances its credibility and potential for growth within the AI sector [2] Market Perspective - The discussion around Celestica reflects a broader trend in the market where multiple players can coexist and succeed, countering the notion that advancements by one company necessarily detract from others [2] - There is a belief that while Celestica shows promise, other AI stocks may offer higher returns with limited downside risk, indicating a competitive landscape in AI investments [2]

Core Viewpoint - Fabinet's shares have reached a record high following JP Morgan's price target increase from $345 to $430, driven by strong investments in data center infrastructure, resulting in an 85% gain year-to-date [1][5]. Company Overview - Fabinet operates as a contract manufacturer, designing advanced optical equipment and providing components such as amplifiers and transceivers for optical communications networks [2][3]. - The company also offers supply chain management, packaging solutions, and industrial laser manufacturing, which are utilized in various sectors including medical devices [4]. Financial Performance - Fabinet has a market capitalization of approximately $15 billion and generated about $3.5 billion in sales on a trailing basis [5]. - Sales are projected to increase to around $4.6 billion next year, reflecting a growth of 4.6% compared to $4 billion this year, with a 17% increase expected, which is 300 basis points higher than the 5-year average [6]. - Earnings growth is anticipated to be around 20%, significantly improving from the 14% 5-year average, indicating a positive trend in financial performance [6]. Market Trends - The demand for data center and AI infrastructure is expected to remain robust through 2026, benefiting companies like Fabinet that supply essential components for optical communications [5]. - There is a noted rotation in investment from larger mega-cap companies to mid-tier businesses within the AI ecosystem, which includes Fabinet and its peers [10].