Investors' Confidence Boosted Perimeter Solutions (PRM) in Q4

iMGP Global Partner, an investment management company, released its fourth quarter 2025 investor letter for the "iMGP Small Company Fund”. A copy of the letter can be downloaded here. The Fund returned 1.33% in the fourth quarter compared to the Russell 2000 Index’s 2.19% return. The Fund’s returns were flat at 0.01% in 2025, compared to a 12.81 return for the Index. In many respects, the market situation returned to normal in the fourth quarter. The Fund's poor performance in the fourth quarter was caused by the biotech businesses' impressive performance, which increased by more than 25%. The Fund generally avoids biotech stocks due to their extremely binary character. The majority of the year's underperformance happened in the third quarter due to style-related factors. Moving forward to 2026, the Fund hoped to continue to refine its process and improve its performance with a commitment to invest in high-quality, growing firms. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, iMGP Small Company Fund highlighted stocks like Perimeter Solutions, Inc. (NYSE:PRM). Perimeter Solutions, Inc. (NYSE:PRM) is a leading manufacturer of firefighting products, electronic components, lubricant additives, and engineered machinery. On March 09, 2026, Perimeter Solutions, Inc. (NYSE:PRM) stock closed at $23.82 per share. One-month return of Perimeter Solutions, Inc. (NYSE:PRM) was -12.62%, and its shares gained 159.76% over the past 52 weeks. Perimeter Solutions, Inc. (NYSE:PRM) has a market capitalization of $3.56 billion.

iMGP Small Company Fund stated the following regarding Perimeter Solutions, Inc. (NYSE:PRM) in its fourth quarter 2025 investor letter:

"Perimeter Solutions, Inc. (NYSE:PRM) is the sole supplier of aerially deployed fire-retardant chemicals used to prevent or slow the spread of wildfire. The stock outperformed in 4Q as the market continues to gain confidence in the business which, in our view, was grossly undervalued at the start of the year. When we initially invested in PRM in 2022, two of our most significant critiques of the business were that 1) its monopoly status was being challenged by a new entrant and 2) the business was inherently volatile due to the unpredictability of wildfire activity. In 2025, PRM’s would-be competitor shuttered its business and PRM signed a new five-year agreement with the U.S. Department of Agriculture, locking in its position for the next several years. In addition, PRM’s 3Q results reported in October demonstrated significant progress in reducing the volatility of the business. PRM grew its fire retardant revenue despite acres burned in the U.S. declining by -60% year-over-year. That better-than-expected result was a function of the government’s more aggressive attack posture to suppress fires (especially in light of high-profile events such as the Palisades fire) as well as PRM’s efforts to improve the mix of recurring services revenue in its contracts. The competitive clarity and improved revenue mix should improve the multiple investors are willing to place on PRM’s earnings, which are growing considerably. Lastly, we were encouraged to see the company deploy capital to acquire a substantial new business platform which, given our trust in management and their track record with the legacy PRM businesses, we expect will generate strong returns for shareholders. PRM remains the largest position in the portfolio."

Perimeter Solutions, Inc. (NYSE:PRM) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 33 hedge fund portfolios held Perimeter Solutions, Inc. (NYSE:PRM) at the end of the fourth quarter, up from 28 in the previous quarter. In Q4 2025, Perimeter Solutions, Inc.'s (NYSE:PRM) revenue grew 19% to $102.8 million and adjusted EBITDA rose 9% to $36 million. While we acknowledge the potential of Perimeter Solutions, Inc. (NYSE:PRM) 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 Perimeter Solutions, Inc. (NYSE:PRM) and shared a bullish thesis 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.