Long Cast Advisers' Updates on Pro-Dex (PDEX)

Long Cast Advisers, an investment management firm, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund’s cumulative net returns improved 4%. The fund returned a cumulative 266% net of fees, or 14% CAGR, since its inception in November 2015 through the quarter-end of Q3 2025. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Long Cast Advisers highlighted stocks such as Pro-Dex, Inc. (NASDAQ:PDEX). Pro-Dex, Inc. (NASDAQ:PDEX) is a leading powered surgical instruments manufacturing company for medical device original equipment manufacturers. The one-month return of Pro-Dex, Inc. (NASDAQ:PDEX) was 1.50%, and its shares lost 25.65% of their value over the last 52 weeks. On November 28, 2025, Pro-Dex, Inc. (NASDAQ:PDEX) stock closed at $36.44 per share, with a market capitalization of $119.523 million.

Long Cast Advisers stated the following regarding Pro-Dex, Inc. (NASDAQ:PDEX) in its third quarter 2025 investor letter:

"Pro-Dex, Inc. (NASDAQ:PDEX) issued a mid-September press release after a significant and unexplained decline in the stock that basically said: “Please be aware we aren’t the blockchain platform that trades under the same ticker in the crypto markets.” Then it added a new risk disclosure in its 10Q “AI-errors could be bad for the stock” and indicated that a litigation-focused law firm issued an AI-generated press release based on two year old news and stale financial data to solicit shareholders for a potential class action.

From the ridiculous to the sublime, the same 10Q indicated a raft of positive news: The company is negotiating and anticipates a contract renewal with its largest client; it is concurrently pursuing an acquisition of an existing supplier “to help meet the expected increased demand currently being contemplated by our largest customer”; it is launching its own self-branded product in the CMT and thoracic verticals; it affirmed that its 2017 exclusive supply agreement with robotics startup Monogram will transfer to Zimmer Biomet, which acquired Monogram in October; and it detailed the gains it will book next quarter and possibly in the future if Monogram meets performance hurdles through 2030 (Monogram was founded by a former engineer from PDEX, which owned roughly 2M shares).

We have been invested in PDEX for several years. It is a manufacturer niche contract with a software embedded surgical tool for driving screws without stripping. It has a long history of incremental improvement, value creation, a raft of tailwinds and fewer than 4M shares outstanding, which they typically buy back opportunistically. I recently attended the shareholder meeting and appreciate the company’s incremental approach to long term strategic investment and value creation. Most compelling of all is our purchase price; in the low-$30’s it is trading at 8x trailing EBITDA and more than 50% below its 52-week high. With a depressed stock and catalysts on the horizon, my confidence in its likelihood of becoming a five year double warrants a concentrated position. It is now a top-five holding."

Pro-Dex, Inc. (NASDAQ:PDEX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 2 hedge fund portfolios held Pro-Dex, Inc. (NASDAQ:PDEX) at the end of the third quarter, which was 4 in the previous quarter. While we acknowledge the potential of Pro-Dex, Inc. (NASDAQ:PDEX) 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 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.