Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund returned 8.60% compared to a 4.97% return for the Russell 2000 Value Index. Moreover, the Fund returned 5.87% YTD, compared to -3.16% for the index. Additionally, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its second-quarter 2025 investor letter, FPA Queens Road Small Cap Value Fund highlighted stocks such as Nelnet, Inc. (NYSE:NNI). Nelnet, Inc. (NYSE:NNI) is a financial services company that engages in loan servicing, education technology services, and payment businesses. The one-month return of Nelnet, Inc. (NYSE:NNI) was 5.54%, and its shares gained 16.29% of their value over the last 52 weeks. On August 18, 2025, Nelnet, Inc. (NYSE:NNI) stock closed at $127.11 per share, with a market capitalization of $4.598 billion.
FPA Queens Road Small Cap Value Fund stated the following regarding Nelnet, Inc. (NYSE:NNI) in its second quarter 2025 investor letter:
“We added two new positions to the Fund during the second quarter. Nelnet, Inc. (NYSE:NNI) is a financial conglomerate based in Lincoln, NE and chaired and controlled by Michael Dunlap. From its core business of holding a levered portfolio of federally guaranteed FFELP student loans, Nelnet has built sizable operations in loan servicing and education software and payments. Mr. Dunlap has built a culture that is entrepreneurial, opportunistic, and aligned, and Nelnet has successfully found ways to reinvest the earnings and runoff from its loan portfolio. Like Ingles, Nelnet is asset-rich and we think should compound book value at an attractive rate over the long term.”
An accountant in their office, taking notes on a sophisticated ledger.
Nelnet, Inc. (NYSE:NNI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held Nelnet, Inc. (NYSE:NNI) at the end of the first quarter, which was 18 in the previous quarter. While we acknowledge the potential of Nelnet, Inc. (NNI) 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.
In another article, we covered Nelnet, Inc. (NYSE:NNI) and shared a bullish thesis on the stock. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.
