Palm Valley Capital Management, an investment management firm, has released the Q4 2025 “Palm Valley Capital Fund” Investor Letter. A copy of the letter can be downloaded here. In the fourth quarter, the Palm Valley Capital Fund appreciated 0.66%, compared to a 1.70% gain for the S&P SmallCap 600 and a 3.12% rise for the Morningstar Small Cap Total Return Index. At the start of the quarter, the Fund allocated 74.1% to Treasuries and increased to 76.3% at the end of the quarter. The Fund’s stock holdings increased by 1.12% over the past three months (excluding the effects of fund operating expenses). Stock performance has been positively influenced by investments in precious metals, especially as silver has been the Fund’s largest allocation in recent years. Additionally, please see the fund’s top five holdings for its top picks in 2025.
In its Q4 2025 investor letter, Palm Valley Capital Fund highlighted stocks such as Utz Brands, Inc. (NYSE:UTZ). Utz Brands, Inc. (NYSE: UTZ) is an American snack food manufacturer. Utz Brands, Inc. (NYSE:UTZ)’s one-month return was 0.51% and its shares lost 30.53% of their value over the past 52 weeks. On January 5, 2026, Utz Brands, Inc. (NYSE:UTZ) stock closed at $9.83 per share, with a market cap of $860.221 million.
Palm Valley Capital Fund stated the following regarding Utz Brands, Inc. (NYSE:UTZ) in its Q4 2025 Investor Letter:
“During the fourth quarter, we purchased three new positions: Domino’s Pizza Group plc (ticker: DOM LN), Utz Brands, Inc. (NYSE:UTZ) and Ingredion (ticker: INGR). As has been the case for several years, our initial weightings in new names were quite modest as most of them just reached our minimum required discount. Founded in 1921, Utz Brands, Inc. is one of America’s leading manufacturers of savory snacks, including potato chips, tortilla chips, pretzels, cheese snacks and pork skins. His portfolio includes bands such as Utz, Zapp’s, On The Border, Golden Flake and Boulder Canyon. Utz has invested heavily in productivity initiatives and geographic expansion. As a result, capital spending has been high, averaging $100 million per year over the past two years. High capital spending and growth have also contributed to above-average financial leverage. Looking ahead, management expects capital spending to normalize in 2026, falling to between $60 million and $70 million per year. Combined with the proceeds from the sale of the facilities, the reduction in expenses should make it possible to reduce the debt in the near future. As a savory snacks company, Utz benefits from attractive margins, consistent demand and strong free cash flow potential. Utz is well positioned with several brands generating healthy organic growth and gaining market share. Boulder Canyon chips, in particular, have performed exceptionally well over the past year, benefiting from consumer demand for “better-for-you” snacks made with seed-free oils. We are attracted to Utz’s stable business, improving free cash flow and balance sheet which we expect will improve significantly over the next year. At the time of purchase, shares were trading at approximately 12 times our 2026 free cash flow estimate and offered a dividend yield of 2.6%.
