Why FPA Queens Road Small Cap Value Fund Aggressively Reduced Its Stake in Vishay Intertechnology, Inc. (VSH)

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 Vishay Intertechnology, Inc. (NYSE: VSH ). Vishay Intertechnology, Inc. (NYSE:VSH) manufactures passive electronic components and discrete semiconductors, including resistors, inductors, capacitors, MOSFETs, and diodes. The one-month return of Vishay Intertechnology, Inc. (NYSE:VSH) was -30.27% while its shares traded between $11.77 and $69.47 over the last 52 weeks. On October 30, 2026, Vishay Intertechnology, Inc. (NYSE:VSH) stock closed at approximately $26.74 per share, with a market capitalization of about $4.10 billion.

FPA Queens Road Small Cap Value Fund stated the following regarding Vishay Intertechnology, Inc. (NYSE:VSH) in its Q3 2026 investor letter:

" Vishay Intertechnology (NYSE:VSH)makes passive electronic components and discrete semiconductors (resistors, inductors, capacitors, MOSFETs, diodes, etc.). Although the industry is cyclical, competitive dynamics are stable and VSH benefits from incremental growth from electric vehicles and industrial electrification. In 2025, the industry was struggling from a cyclical downturn following the excesses and component hoarding of the Covid era. The stock declined again when President Trump announced his tariffs in April 2025. But the industry has come roaring back; the stock rallied aggressively following VSH's Q1 earnings release announced a year-over-year sales increase of 17%, strength across all end markets and distribution channels, and a book-to-bill ratio of 1.34. Vishay is also incrementally selling to data centers. We believe the stock may have gotten caught up in the "AI trade" and have aggressively reduced our position."