Palomar Holdings (PLMR) Slid on Investors' Concerns

Fred Alger Management, an investment management company, released its “Alger Weatherbie Specialized Growth Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets continued their upward trajectory in the quarter, with the S&P 500 Index surging 8.12%. Class A shares of the fund underperformed the Russell 2500 Growth Index during the third quarter of 2025. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Alger Weatherbie Specialized Growth Fund highlighted stocks such as Palomar Holdings, Inc. (NASDAQ:PLMR). Palomar Holdings, Inc. (NASDAQ:PLMR), with a market capitalization of $3.02 billion, is a specialty insurance company. The one-month return of Palomar Holdings, Inc. (NASDAQ:PLMR) was -3.42%, and its shares gained 20.86% of their value over the last 52 weeks. On October 28, 2025, Palomar Holdings, Inc. (NASDAQ:PLMR) stock closed at $112.76 per share.

Alger Weatherbie Specialized Growth Fund stated the following regarding Palomar Holdings, Inc. (NASDAQ:PLMR) in its third quarter 2025 investor letter:

"Palomar Holdings, Inc. (NASDAQ:PLMR) is a specialty insurance company providing property and casualty coverage focused on risks such as earthquakes, hurricanes, and floods, primarily serving residential and commercial clients in the United States. The company generates revenue by underwriting specialized insurance policies and collecting premiums from policyholders. We believe Palomar is favorably positioned due to its targeted focus on underserved markets and strategic growth initiatives. During the quarter, shares detracted from performance as investors grew concerned about underwriting quality despite strong second-quarter earnings. Palomar’s combined ratio (i.e., incurred losses and expenses as percentage of earned premiums) came in higher than analyst estimates, driven by elevated expenses and a mix shift from early crop premiums, signaling margin pressure. These concerns overshadowed strong second-quarter earnings, driven by strong premium growth, where management raised its full-year earnings guidance."

Palomar Holdings, Inc. (NASDAQ:PLMR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 28 hedge fund portfolios held Palomar Holdings, Inc. (NASDAQ:PLMR) at the end of the second quarter, up from 25 in the previous quarter. While we acknowledge the potential of Palomar Holdings, Inc. (NASDAQ:PLMR) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Palomar Holdings, Inc. (NASDAQ:PLMR) and shared Conestoga Capital Advisors' views on the company. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.