What Makes APi Group (APG) an Economically Resilient Business Model?

Greystone Capital Management, an investment management company, released its fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, the Median Account return for separate accounts managed by the firm was +0.3%, net of fees brining the full year net returns to +2.8%. The Fund has returned a cumulative +197.7% or +21.9% per year, net of fees, since inception in Q4 2019. When compared to the S&P 500 and Russell 2000 returns, the results for the fourth quarter and the full year of 2025 were disappointing, which stood at +2.7% and +2.2%, respectively, for the quarter, and +17.4% and +13.5%, respectively, for 2025. While fourth-quarter and full-year 2025 results lagged behind indices, the firm maintains a long-term approach, not focusing on single quarters or calendar years. The concentrated, differentiated strategy leads to expected divergence from major indices, with tracking error seen as a feature rather than a flaw. The firm cited poor stock selection, strong performers in 2024 facing valuation compression, and a lack of AI-themed investments as reasons for its underperformance in 2025. In addition, you can check the Fund’s top 5 holdings to find out its best picks for 2025.

In its fourth-quarter 2025 investor letter, Greystone Capital Management highlighted APi Group Corporation (NYSE:APG). APi Group Corporation (NYSE:APG) is a safety and specialty services provider. The one-month return of APi Group Corporation (NYSE:APG) was 9.57%, and its shares gained 64.69% of their value over the last 52 weeks. On January 28, 2026, APi Group Corporation (NYSE:APG) stock closed at $41.92 per share, with a market capitalization of $18.073 billion.

Greystone Capital Management stated the following regarding APi Group Corporation (NYSE:APG) in its fourth quarter 2025 investor letter:

"APi Group Corporation (NYSE:APG) continues to execute as a steady, high-quality business operating in mission-critical fire and life-safety services. 2025 was another strong year, characterized by mid-single-digit organic growth, disciplined pricing, expanding margins, and robust cash generation. End-market demand remains healthy, and APG continues to shift the revenue mix toward recurring inspection, monitoring, and service work, which carries higher margins, lower working capital intensity, and strong customer stickiness. APG remains one of the most economically resilient models we own with recurring revenue, critical infrastructure exposure, and zero technological displacement risk.

The balance sheet has returned to a position of strength following the Chubb acquisition and subsequent deleveraging, once again enabling the company to pursue disciplined, bolt-on M&A while continuing to grow through organic initiatives. This, along with cash generation, a long runway to reinvest, and favorable working capital dynamics makes APG recession resistant and worthy of a high multiple.

As a result, the market has finally given APG some credit for business strength and quality. Today, APG trades at 21x free cash flow and 18.5x EBITDA. While this doesn’t appear headline cheap for a single digit organic grower, I view forward returns as primarily earnings-driven rather than multiple-driven, which is exactly the type of profile I prefer. If APG achieves their three-year targets of $10B in revenues, $1.6 billion in EBITDA and 80% FCF conversion by 2028, shares should be worth $65 at current multiples for roughly 60% upside. That equates to an 18% annual return profile with limited risk, an underappreciated setup in today’s market."

APi Group Corporation (NYSE:APG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 58 hedge fund portfolios held APi Group Corporation (NYSE:APG) at the end of the third quarter, up from 53 in the previous quarter. APi Group Corporation (NYSE:APG) announced that revenues for the September quarter reached $2.1 billion, marking a 14.2% rise from $1.83 billion during the same period last year. While we acknowledge the potential of APi Group Corporation (NYSE:APG) 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 APi Group Corporation (NYSE:APG) and shared ClearBridge Mid Cap Strategy's views on the company. In addition, please check out our hedge fund investor letters Q4 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.