Core Insights - The FPA Queens Road Small Cap Value Fund returned -0.36% in Q4 2025, underperforming the Russell 2000 Value Index which gained 3.26% during the same period [1] - For the full year 2025, the Fund achieved a return of 13.36%, slightly outperforming the Index's 12.59% gain [1] - The Fund's strategy focuses on quality and value to protect clients from market drawdowns, but it underperformed in the second half of 2025 due to a market preference for speculative and low-quality stocks [1] Company Analysis: Fabrinet (NYSE:FN) - Fabrinet is a contract manufacturer specializing in optical networking equipment and modules, dominating its niche with impressive historical revenue growth and increasing operating margins [3] - As of February 12, 2026, Fabrinet's stock closed at $462.05 per share, with a one-month return of -6.55% and a 12-month increase of 107.16% [2] - The company reported record revenue of $1.13 billion in Q2 fiscal 2026, reflecting a 36% year-over-year growth [5] - Fabrinet's products are in high demand in data centers, particularly for training artificial intelligence models, with Nvidia being a significant customer [3] - Despite its strong position, the Fund has been trimming its holdings in Fabrinet due to concerns that stock price expectations may have outpaced actual spending in data centers [3] Hedge Fund Interest - Fabrinet was held by 44 hedge fund portfolios at the end of Q3 2025, an increase from 32 in the previous quarter [5] - The company is not listed among the 30 most popular stocks among hedge funds, indicating a mixed sentiment in the investment community [5]

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]