Portillo's Inc.'s (PTLO) Momentum Turned in Q1

Middle Coast Investing, an investment advisor firm, released its first-quarter investor letter. A copy of the letter can be downloaded here. Middle Coast Investing had a difficult but manageable first quarter, but everyone has suffered since the Liberation Day crash at the beginning of the second quarter. To manage the volatility, the firm decided to increase cash goal levels by roughly 5% for each portfolio. In the quarter, the firm sold 3% more than it bought. In Q1 2025, the US Portfolios returned -3.7% compared to -4.6% for the S&P 500. It’s Core U.S. portfolios returned -0.7% while Russell 2000 returned -9.8%, S&P 600 returned -9.3% and Nasdaq generated -10.4% for the same period. However, its European Portfolios appreciated by 9.2%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first quarter 2025 investor letter, Middle Coast Investing emphasized stocks such as Portillo’s Inc. (NASDAQ:PTLO). Portillo’s Inc. (NASDAQ:PTLO) is a US-based restaurants operator. The one-month return of Portillo’s Inc. (NASDAQ:PTLO) was -3.21%, and its shares lost 0.33% of their value over the last 52 weeks. On April 15, 2025, Portillo’s Inc. (NASDAQ:PTLO) stock closed at $12.08 per share with a market capitalization of $771.546 million.

Middle Coast Investing stated the following regarding Portillo’s Inc. (NASDAQ:PTLO) in its Q1 2025 investor letter:

"Portillo’s Inc. (NASDAQ:PTLO) became a big position for us last quarter as the stock plummeted for no clear reason. Sometimes momentum dictates; that momentum turned in Q1. The company announced better than expected results for Q4 and guidance for 2025, and is making progress on its restaurant of the future models. The turnaround in the stock price may have again got ahead of itself, and we sold shares in the $14 range. But the food itself is a reasonably good value, and I hope demand holds up even as we hit a recessionary environment."

Portillo’s Inc. (NASDAQ:PTLO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held Portillo’s Inc. (NASDAQ:PTLO) at the end of the fourth quarter which was 12 in the previous quarter. Portillo’s Inc. (NASDAQ:PTLO) generated $184.6 million in revenues in the fourth quarter, representing a decrease of 1.7% compared to Q4 2023. While we acknowledge the potential of Portillo’s Inc. (NASDAQ:PTLO) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We covered Portillo’s Inc. (NASDAQ:PTLO) in another article, where we shared the list of restaurant stocks to buy under $20. In addition, please check out our hedge fund investor letters Q1 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.