Here's Why Simply Good Foods Company (SMPL) Sold Off in Q3

Madison Investments, an investment advisor, released its “Madison Small Cap Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The third quarter was difficult for the Small Cap Fund.  The small-cap index’s performance was broad-based. The Madison Small Cap Fund (class Y) was down 1.3% in the quarter, significantly underperforming the benchmarks. The underperformance was driven by stock selection and exacerbated by a very speculative market. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Madison Small Cap Fund highlighted stocks such as The Simply Good Foods Company (NASDAQ:SMPL). The Simply Good Foods Company (NASDAQ:SMPL) is a consumer-packaged food and beverage company. The one-month return of The Simply Good Foods Company (NASDAQ:SMPL) was 0.74%, and its shares lost 48.45% of their value over the last 52 weeks. On November 20, 2025, The Simply Good Foods Company (NASDAQ:SMPL) stock closed at $20.11 per share, with a market capitalization of $2.022 billion.

Madison Small Cap Fund stated the following regarding The Simply Good Foods Company (NASDAQ:SMPL) in its third quarter 2025 investor letter:

"Primo Brands & The Simply Good Foods Company (NASDAQ:SMPL) were also down in the quarter. SMPL, on other hand, has delivered pretty good results. This stock has been rerated downward drastically and we believe that one explanation is the broad-based sell off and downward pressure in almost all Consumer Staples stocks across the market cap spectrum. In short, in this bull market, defensive businesses like Consumer Staples are sold in favor of extremely speculative investments, mostly, but not entirely, tied to the AI theme."

The Simply Good Foods Company (NASDAQ:SMPL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 32 hedge fund portfolios held The Simply Good Foods Company (NASDAQ:SMPL) at the end of the second quarter, up from 28 in the previous quarter. In the fourth quarter of fiscal 2025, The Simply Good Foods Company's (NASDAQ:SMPL) net loss was $12.4 million, down from the net income of $29.3 million in fourth quarter of fiscal 2024. While we acknowledge the potential of The Simply Good Foods Company (NASDAQ:SMPL) 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 The Simply Good Foods Company (NASDAQ:SMPL) and shared the list of stocks slump amid Wall Street cheer. 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.