SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun Small Cap Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, the strategy returned 11.73% on a gross basis (11.52% net) compared to a 12.39% return for the Russell 2000 Index and 12.60% for the Russell 2000 Value Index. The strategy returned -0.66% on a gross basis (-0.10% net) for the trailing twelve months compared to 10.76% and 7.88% respectively for the indexes over the same period. In addition, please check the top 5 holdings of the strategy to know its best pick in 2025.
In its third-quarter 2025 investor letter, SouthernSun Small Cap Strategy highlighted stocks such as Modine Manufacturing Company (NYSE:MOD). Modine Manufacturing Company (NYSE:MOD) offers thermal management products and solutions. The one-month return of Modine Manufacturing Company (NYSE:MOD) was -5.44%, and its shares gained 16.90% of their value over the last 52 weeks. On November 4, 2025, Modine Manufacturing Company (NYSE:MOD) stock closed at $146.14 per share, with a market capitalization of $7.694 billion.
SouthernSun Small Cap Strategy stated the following regarding Modine Manufacturing Company (NYSE:MOD) in its third quarter 2025 investor letter:
“Modine Manufacturing Company (NYSE:MOD) was a top contributor in the Small Cap strategy during the third quarter. MOD is a leading thermal management company and since initiating the position earlier this year, the demand outlook for AI datacenters has increased dramatically, driving increased demand for Modine’s cooling equipment. To meet this strong demand, the company will invest $100 million in the next 12-18 months to increase capacity by roughly 80%. The balance sheet is in good shape with ND/Adj. EBITDA ~1x, and management plans to pause acquisitions for the next few quarters as it integrates three recent acquisitions, explores the sale of its light duty vehicle heat exchanger business, and executes on its data center investments. We remain impressed by CEO Neil Brinker and the strong leadership team he has assembled, and we believe they are well positioned to continue creating meaningful shareholder value.”
Modine Manufacturing Company (NYSE:MOD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 49 hedge fund portfolios held Modine Manufacturing Company (NYSE:MOD) at the end of the second quarter, up from 45 in the previous quarter. Modine Manufacturing Company’s (NYSE:MOD) sales for the second quarter of 2026 increased by 12%, primarily due to revenue growth in Climate Solutions. While we acknowledge the potential of Modine Manufacturing Company (NYSE:MOD) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. 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.
