itstargetnews
SouthernSun Asset Management, LLCan investment management firm, published its Q4 2025 “SouthernSun Small Cap Strategy” investor letter. A copy of the letter can be downloaded here. During the quarter, the Small Cap Composite returned -2.45% gross (-2.64% net) compared to 2.19% for the Russell 2000 Index and 3.26% for the Russell 2000 Value Index. The composite returned 6.21% gross (5.40% net) over the trailing 12 months, compared to 12.81% and the 12.59% of the indices, respectively. The letter highlighted economic lessons learned during the 2014-15 oil price crash. Initially seen as a positive development for the global economy, the drop in oil prices later revealed underlying weaknesses, leading to wider economic impacts beyond the energy sector. The author compares this to the current situation with artificial intelligence (AI), warning that while AI is now a fundamental aspect of economic planning and decision-making, its associated risks must be carefully analysed. As the market approaches 2026, the investment landscape is shaped by several scenarios, such as valuation compression and overcapacity in AI infrastructure, rather than inevitable outcomes. SouthernSun Asset Management maintains a disciplined and humble approach focused on intrinsic value and is optimistic about the future, but remains aware of historical lessons. Plus, check out the strategy’s top five holdings for its top picks in 2025.
In its Q4 2025 investor letter, SouthernSun Small Cap Strategy highlighted stocks like Dycom Industries, Inc. (NYSE:DY). Based in Palm Beach Gardens, FloridaDycom Industries, Inc. (NYSE:DY) provides specialized contract services to the telecommunications infrastructure and utility industries. On February 27, 2026, shares of Dycom Industries, Inc. (NYSE:DY) closed at $420.02 per share. The one month profitability of Dycom Industries, Inc. (NYSE:DY) was 162.83% and its stock gained 2.83% over the past 52 weeks. Dycom Industries, Inc. (NYSE:DY) has a market cap of $12.682 billion.
SouthernSun Small Cap Strategy stated the following about Dycom Industries, Inc. (NYSE:DY) in its Q4 2025 investor letter:
“During the fourth quarter of 2025 we exited positions in Dycom Industries, Inc. (NYSE:DY) and Timken Inc. (TKR) in the Small Cap strategy. Dycom Industries Inc. (DY) After a long and successful ownership of DY, we decided to exit our position in the fourth quarter in favor of more attractive demand from Internet providers. The deployment, but we believe that much of the recent valuation expansion is being driven by valuation AI exuberance. While fiber connections to new AI data centers will be an incremental opportunity for DY, we do not expect AI-related fiber demand to be material to the overall value of the business. Historically, DY has been disciplined with its focus on wireline and wireless, but this acquisition marked a significant departure from that discipline.”
