SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun Small Cap Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. During the quarter, the Small Cap Composite returned -2.45% on a gross basis (-2.64% net) compared to 2.19% for the Russell 2000 Index and 3.26% return for the Russell 2000 Value Index. The Composite returned 6.21% on a gross basis (5.40% net) over the trailing 12 months compared to 12.81% and 12.59% for the indexes, respectively. The letter highlighted the economic lessons learned during the oil price collapse of 2014-15. Initially seen as a positive development for the global economy, the decline in oil prices later revealed underlying weaknesses, leading to broader economic impacts beyond the energy sector. The author compares this to the current situation with artificial intelligence (AI), cautioning that while AI is now a fundamental aspect of economic planning and decision-making, its associated risks must be carefully analyzed. As the market approaches 2026, the investment landscape is shaped by various scenarios, including valuation compression and overcapacity in AI infrastructure, rather than inevitable outcomes. SouthernSun Asset Management maintains a disciplined, humble approach focused on intrinsic value and is optimistic about the future but remains aware of historical lessons. In addition, please check the Strategy’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, SouthernSun Small Cap Strategy highlighted Crane NXT, Co. (NYSE:CXT). Crane NXT, Co. (NYSE:CXT) is an industrial technology company that focuses on providing solutions to secure, detect, and authenticate customers’ important assets. On February 27, 2026, Crane NXT, Co. (NYSE:CXT) stock closed at $48.29 per share. One-month return of Crane NXT, Co. (NYSE:CXT) was -4.53%, and its shares lost 11.51% over the past 52 weeks. Crane NXT, Co. (NYSE:CXT) has a market capitalization of $2.821 billion.
SouthernSun Small Cap Strategy stated the following regarding Crane NXT, Co. (NYSE:CXT) in its fourth quarter 2025 investor letter:
“Crane NXT, Co. (NYSE:CXT) was a bottom contributor despite delivering solid operating performance in its most recent earnings release. The company reported sales of $445 million (+10% YoY) with a core sales increase of 1%, adjusted operating margin of 24.7%, and adjusted EPS of $1.28, while also raising full-year sales growth guidance. However, management also highlighted macroeconomic uncertainty impacting demand in the Payment Innovations segment, which we believe weighed on sentiment even as the Security & Authentication Technologies segment continued to show momentum and free cash flow conversion remained strong. Crane NXT also announced and completed the first phase of its strategic acquisition of an Italian technology firm – Antares Vision S.p.A. Antares is a global provider of inspection, detection and track-and-trace solutions that will expand the company’s exposure into life sciences (including pharmaceutical traceability) and the food & beverage sectors; the closing is expected in 2026. CXT is a recent addition to the portfolio, and we spent time with management in the 4th quarter and have further plans to visit with the team in 1q26. We are confident the business fundamentals and capital allocation discipline align with our objectives for risk and long-term capital appreciation.”
