Palm Valley Capital Management, an investment management firm, released the “Palm Valley Capital Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, Palm Valley Capital Fund appreciated 0.57% compared to an 8.93% decline in the S&P SmallCap 600 and a 6.08% drop in the Morningstar Small Cap Total Return Index. Cash was 77.6% of Fund assets at the start of the quarter and 76.5% at the conclusion. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first quarter 2025 investor letter, Palm Valley Capital Fund emphasized stocks such as Resources Connection, Inc. (NASDAQ:RGP). Resources Connection, Inc. (NASDAQ:RGP) offers consulting services to business customers. The one-month return of Resources Connection, Inc. (NASDAQ:RGP) was -26.17%, and its shares lost 56.32% of their value over the last 52 weeks. On April 4, 2025, Resources Connection, Inc. (NASDAQ:RGP) stock closed at $5.20 per share with a market capitalization of $172.622 million.

Palm Valley Capital Fund stated the following regarding Resources Connection, Inc. (NASDAQ:RGP) in its Q1 2025 investor letter:

"During the period, we added to our weightings in Kelly Services (ticker: KELYA), Resources Connection, Inc. (NASDAQ:RGP), and Heartland Express (ticker: HTLD). RGP has not bucked painful staffing sector trends, but the company has a sterling balance sheet, and we believe results are well below normalized."

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Resources Connection, Inc. (NASDAQ:RGP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Resources Connection, Inc. (NASDAQ:RGP) at the end of the fourth quarter which was 23 in the previous quarter. In the third quarter of fiscal 2025, Resources Connection, Inc. (NASDAQ:RGP) generated $129.4 million in revenues which was in line with the client budget constraints and slower project ramp-ups. While we acknowledge the potential of Resources Connection, Inc. (NASDAQ:RGP) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We covered Resources Connection, Inc. (NASDAQ:RGP) in another article, where we shared the list of best consulting stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.