White Falcon's Q3 2026 letter reports 2.7% quarterly and 4.6% year-to-date net returns. The letter can be downloaded here . Management attributes the underperformance mainly to a sharp September pullback, rising interest rates, and zero energy exposure. The portfolio remains concentrated in contrarian, value-oriented holdings. White Falcon emphasizes reassessing investment theses as AI accelerates industry change, while maintaining conviction in businesses with durable advantages and attractive long-term risk-reward potential. Additionally, reviewing the Strategy's top five holdings provides insight into its best positions for 2026.
In its Q3 2026 investor letter, White Falcon Capital Management highlighted Grifols, S.A. (NASDAQ: GRFS ). Grifols, S.A. (NASDAQ:GRFS) is a global healthcare company that develops plasma-derived medicines and diagnostic solutions to treat rare, chronic, and life-threatening conditions. On October 22, 2026, Grifols, S.A. (NASDAQ:GRFS) closed at $7.45, with a $5.07 billion market capitalization. Grifols, S.A. (NASDAQ:GRFS) posted a 20.32% YTD decline, trading within a 52-week range of $6.96 to $9.90.
White Falcon Capital Management stated the following regarding Grifols, S.A. (NASDAQ:GRFS) in its Q3 2026 investor letter:
"Higher interest rates have also weighed on valuations for more leveraged businesses such as Grifols, S.A.(NASDAQ:GRFS) and Canadian Solar (CSIQ). At Grifols, strong demand for plasma derived medicines and ongoing operational improvements are supporting the company's recovery. We expect substantial free cash flow generation in the second half of 2026. As Grifols generates cash and pays down debt its interest expenses go down and refinancing needs diminish. The company also has another option - the IPO of their U.S. business. Grifols operates in an oligopoly in the US in collecting and processing plasma. A separate listing of this business in the US at multiples in line with its U.S. peers can substantially lower its debt balance and help re-rate the stock. Trading at approximately 9x forward earnings, we believe Grifols is materially undervalued relative to its intrinsic value."
Grifols, S.A. (NASDAQ:GRFS) is not on our list of the 40 Most Popular Stocks Among Hedge Funds . As per our database, 13 hedge fund portfolios held Grifols, S.A. (NASDAQ:GRFS) at the end of the second quarter, which was 16 in the previous quarter. While we acknowledge the potential of Grifols, S.A. (NASDAQ:GRFS) 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 2026 page for more investor letters from hedge funds and other leading investors.
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This article is originally published at Insider Monkey .
