Palm Valley Capital Management has released its third-quarter 2026 investor letter for the Palm Valley Capital Fund. The fund gained 1.61% during the quarter, outperforming the S&P SmallCap 600 Index, which declined 7.93%, and the Morningstar Small Cap Total Return Index, which fell 5.60%. Treasury bills accounted for 75.5% of the fund’s assets at quarter-end, while its equity holdings returned 4.8%.
The letter examines a market in which small-cap stocks lagged their larger peers even as the S&P 500 approached its highs. The managers draw parallels between sharp stock-price swings in a rising market and conditions during the technology bubble. They also question whether policies aimed at preserving today’s wealth come at the expense of future prosperity, arguing that rising asset prices deepen economic disparities while shifting financial burdens to future generations. Citing federal debt exceeding $40 trillion, the managers frame the debate around how wealth and obligations are distributed across generations, alongside the familiar divide between rich and poor.
WH Group Limited (OTCMKTS: WHGLY) is a Hong Kong–headquartered food company engaged in packaged meat production, pork processing, and hog farming, with operations across China, North America, and Europe. Its U.S.-traded American depositary receipts provide investors with exposure to the international meat producer. The latest closing data I could verify was October 28, 2026, when its ADRs closed at $15.90, an increase of 5.86% from the previous session, with a reported market capitalization of approximately $10.20 billion.
Here’s what Palm Valley Capital Management has to say about WH Group Limited (OTCMKTS: WHGLY):
“We reduced our WH Group position at stronger prices during the summer. Since then, pork industry fundamentals have weakened amid higher feed costs, including corn, and softer demand as consumers opt for less expensive chicken. Smithfield derives the vast majority of its profitability from highervalue packaged meats—including Farmland bacon, Eckrich sausage, Nathan’s Famous hot dogs, and Armour lunch meat—rather than commodity fresh pork. This supports profitability when hog farming and processing are challenged. We recognize the volatility inherent in the pork cycle and, as with our investment in WH Group, aim to capitalize when investors overreact to prevailing industry trends. The stock is paying a 6.7% dividend yield.”
WH Group Limited (OTCMKTS: WHGLY) released its nine-month results on October 27, 2026, reporting revenue of $20.61 billion, an increase of 0.6% year over year. Operating profit declined 11.9% to approximately $1.70 billion, as lower pork prices and weaker demand pressured performance. Profit attributable to shareholders after biological fair-value adjustments fell to $881 million, compared with approximately $1.22 billion a year earlier.
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Disclosure: No material interests to disclose. This article was originally published on Global Market Bulletin.
