FPA Queens Road Small Cap Value Fund Raised Its Holdings in Sprouts Farmers Market (SFM)

Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund returned -0.36% in Q4 2025, compared to the Russell 2000 Value Index’s 3.26%. In 2025, the Fund has returned 13.36% compared to 12.59% gain for the Index. The Fund outperformed in the first half of 2025, when markets were weak and volatile. However, in the second half of 2025, markets favored speculative and low-quality stocks, leading to the Fund’s underperformance. The portfolio is designed to protect clients from market drawdowns by focusing on quality and value. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, FPA Queens Road Small Cap Value Fund highlighted stocks such as Sprouts Farmers Market, Inc. (NASDAQ:SFM). Sprouts Farmers Market, Inc. (NASDAQ:SFM) is a US-based retailer of fresh, natural, and organic food products under the Sprouts brand. The one-month return of Sprouts Farmers Market, Inc. (NASDAQ:SFM) was -13.95%, and its shares lost 61.82% of their value over the last 52 weeks. On February 12, 2026, Sprouts Farmers Market, Inc. (NASDAQ:SFM) stock closed at $67.63 per share, with a market capitalization of $6.61 billion.

FPA Queens Road Small Cap Value Fund stated the following regarding Sprouts Farmers Market, Inc. (NASDAQ:SFM) in its fourth quarter 2025 investor letter:

"We made significant additions to our holdings in Sprouts Farmers Market, Inc. (NASDAQ:SFM) and New Jersey Resources (NJR). 21 Sprouts is a natural and organic grocery store chain that, in our opinion, has best-in-class operating metrics. SFM was a significant winner for the Fund in 2024 and 25H1 and we sold the majority of our position at higher prices. As growth decelerated in 25H2, SFM’s share price collapsed, giving us the opportunity to add to our remaining holdings at an attractive price. New Jersey Resources is a gas utility with additional investments in solar, midstream and services. We think the company is attractive at ~15x earnings."

Sprouts Farmers Market, Inc. (NASDAQ:SFM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 53 hedge fund portfolios held Sprouts Farmers Market, Inc. (NASDAQ:SFM) at the end of the third quarter, compared to 54 in the previous quarter. While we acknowledge the potential of Sprouts Farmers Market, Inc. (NASDAQ:SFM) 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 Sprouts Farmers Market, Inc. (NASDAQ:SFM) and shared a list of best food stocks to buy in 2026. 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.