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 highlighted stocks like Teleflex Incorporated (NYSE: TFX ). Teleflex Incorporated (NYSE:TFX) manufactures medical consumables, primarily catheters and other surgical devices. The one-month return of Teleflex Incorporated (NYSE:TFX) was 12.26% while its shares traded between $100.18 and $145.00 over the last 52 weeks. On October 30, 2026, Teleflex Incorporated (NYSE:TFX) stock closed at approximately $139.77 per share, with a market capitalization of about $5.69 billion.
FPA Queens Road Small Cap Value Fund stated the following regarding Teleflex Incorporated (NYSE:TFX) in its Q3 2026 investor letter:
"Teleflex Incorporated (NYSE:TFX) manufactures a portfolio of medical consumables – mostly a range of catheters along with other surgical devices. The company's recent history has been dramatic – previous management ran a failed growth playbook across unrelated urology products that left the company over levered and unfocused. But we are investing following a strategic and financial turnaround where the company sold its unrelated businesses, is using the proceeds to de-lever and brought in Jason Weidman from Medtronic as CEO. Near-term financials have several moving parts, but we think we are paying a low double digit multiple of normal earnings for a strong and refocused medical device portfolio."
Teleflex Incorporated (NYSE:TFX) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026 . As per our database, 40 hedge fund portfolios held Teleflex Incorporated (NYSE:TFX) at the end of the second quarter, which was 35 in the previous quarter. While we acknowledge the risk and potential of Teleflex Incorporated (NYSE:TFX) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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 Teleflex Incorporated (NYSE:TFX) and shared our thoughts on how the company's cash is coming back to shareholders. 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 .
