Palm Valley Capital Management, an investment management firm, has released the “Palm Valley Capital Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, Palm Valley Capital Fund appreciated 0.66% compared to a 1.70% gain for the S&P SmallCap 600 and a 3.12% rise in the Morningstar Small Cap Total Return Index. At the beginning of the quarter, the Fund allocated 74.1% to Treasury bills and increased to 76.3% by the end of the quarter. The equity holdings of the Fund rose by 1.12% over the past three months (excluding the effects of fund operating expenses). The performance of equities was positively influenced by the investments in precious metals, particularly as silver has been the Fund’s largest allocation for the past few years. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Palm Valley Capital Fund highlighted stocks such as Kelly Services, Inc. (NASDAQ:KELYA). Kelly Services, Inc. (NASDAQ:KELYA) is a staffing solutions provider to various industries. The one-month return of Kelly Services, Inc. (NASDAQ:KELYA) was -1.70%, and its shares lost 37.12% of their value over the last 52 weeks. On January 5, 2026, Kelly Services, Inc. (NASDAQ:KELYA) stock closed at $8.69 per share, with a market capitalization of $307.096 million.
Palm Valley Capital Fund stated the following regarding Kelly Services, Inc. (NASDAQ:KELYA) in its fourth quarter 2025 investor letter:
“In the fourth quarter, the Fund’s top three detractors from performance were Kelly Services, Inc. (NASDAQ:KELYA), Forrester Research (ticker: FORR), and Flowers Foods (ticker: FLO). Kelly’s stock was slammed after it failed to achieve its third quarter guidance and provided a weak outlook for the coming quarters. Kelly’s business had significantly outperformed the staffing industry the past two years. Now, its fortunes are reversing right as overall demand for temporary labor may be stabilizing, with the ASA Staffing Index reporting year-over-year gains in hours and the SIA Bullhorn Staffing Indicator’s comparisons shrinking to low single-digit declines versus a year ago. Although some investors believe AI will keep its boot on the neck of staffers in the coming years, we believe AI is being used frequently as a scapegoat when firms reduce headcount for other reasons. Amazon recently announced 30,000 corporate job cuts aimed to reverse pandemic over hiring.
