FPA Queens Road Small Cap Value Fund Trims Its Stake in TD SYNNEX Corporation (SNX) Despite Strong Data Center Growth

Investment management company First Pacific Advisors recently released its "FPA Queens Road Small Cap Value Fund" Q3 2026 investor letter. A copy of the letter can be downloaded here . The Fund returned -7.62% in the third quarter of 2026, underperforming the Russell 2000 Value Index, which fell 4.91%. However, the Fund's year-to-date return of 17.35% exceeded the benchmark's 16.96%. Portfolio managers attributed the quarterly underperformance primarily to the Fund's lack of exposure to Energy and Healthcare, and weakness in consumer discretionary holdings. They noted that recent small-cap gains had been driven largely by speculative stocks, including loss-making companies and biotechnology businesses, while profitable small-cap companies continued to trade at attractive valuations relative to larger peers. During the quarter, the fund reduced its exposure to appreciated technology stocks and invested in established businesses with sound fundamentals and reasonable valuations. Looking ahead, the managers acknowledged continued market volatility but remained confident in the Fund's long-term prospects, emphasizing that discipline, patience, and a focus on business fundamentals would help the portfolio navigate speculative market conditions. In addition, please check the Fund's top five holdings to know its best picks in 2026.

In its third-quarter 2026 investor letter, FPA Queens Road Small Cap Value Fund discussed TD SYNNEX Corporation (NYSE: SNX ). TD SYNNEX Corporation (NYSE:SNX) is the world's largest IT distributor. The company has diversified beyond hardware into software, security, and services. The one-month return of TD SYNNEX Corporation (NYSE:SNX) was -18.60% while its shares traded between $142.22 and $298.77 over the last 52 weeks. On October 30, 2026, TD SYNNEX Corporation (NYSE:SNX) stock closed at approximately $236.62 per share, with a market capitalization of about $18.88 billion.

FPA Queens Road Small Cap Value Fund stated the following regarding TD SYNNEX Corporation (NYSE:SNX) in its Q3 2026 investor letter:

" TD Synnex (NYSE:SNX)is the largest IT distributor globally. The company has done a good job diversifying away from its historical position in hardware (PCs, peripherals, servers, networking equipment, etc.) and into software, security, and services. TD Synnex is modestly levered and uses its cash flow to repurchase shares and pay dividends. On March 31, the company reported blow-out earnings and provided financials for Hyve, its data center business. Hyve is growing billings at a nearly 100% annualized rate and is on track to contribute 1/3 of the company's operating earnings this year. These numbers were higher than investors anticipated, and the stock has performed very well since their release. We think that TD Synnex is exceptionally well run, has scale and scope advantages versus smaller competitors, and that profits will continue to grow with IT spending at a GDP+ rate. We have trimmed our position, but SNX trades at roughly 13x this year's earnings and continues to be a top 5 holding for the Fund."