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Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” first-quarter 2026 investor letter. A copy of the letter can be downloaded here. In a volatile but positive quarter, the FPA Queens Road Small Cap Value Fund (“Fund”) returned 6.07%, beating the Russell 2000 Value Index’s 4.96%. The Fund expects better performance in down markets and underperformance in speculative ones due to its disciplined approach. Amid ongoing global commodity shocks, political issues, and economic fallout from the Iran conflict, the letter discusses small-caps and the firm's long-term investment strategy. In Q1, the fund continued to rebalance the portfolio towards higher-quality holdings, focusing on balance sheet strength, earnings consistency, and returns on capital. In addition, please check the Fund’s top five holdings to know its best picks in 2026.

In its first-quarter 2026 investor letter, FPA Queens Road Small Cap Value Fund highlighted Dorman Products, Inc. (NASDAQ:DORM) as a newly added position. Headquartered in Colmar, Pennsylvania, Dorman Products, Inc. (NASDAQ:DORM) is an aftermarket automotive products supplier. On May 11, 2026, Dorman Products, Inc. (NASDAQ:DORM) closed at $121.01 per share. One-month return of Dorman Products, Inc. (NASDAQ:DORM) was 9.89%, and its shares lost 7.56% over the past 52 weeks. Dorman Products, Inc. (NASDAQ:DORM) has a market capitalization of $3.62 billion.

FPA Queens Road Small Cap Value Fund stated the following regarding Dorman Products, Inc. (NASDAQ:DORM) in its Q1 2026 investor letter:

"In Q1, we added two new positions – First American Financial (FAF) and Dorman Products, Inc. (NASDAQ:DORM). Dorman Products manufactures and sells aftermarket car parts. The company scores well on our dashboard, having grown historically at a consistent mid-single digit rate, with high returns on capital in a non-cyclical industry. Debt to EBITDA is less than 1x, and DORM uses its cash flow to buy back stock. 2026 earnings will tick down as the company laps an accounting treatment that allowed Dorman to put lower cost, pre-tariff inventory through its cost of goods sold. Dorman is currently trading at a discount to its historical earnings multiple and we believe its shares are attractively priced."

Dorman Products, Inc. (NASDAQ:DORM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 21 hedge fund portfolios held Dorman Products, Inc. (NASDAQ:DORM) at the end of the fourth quarter, up from 19 in the previous quarter. In Q1 2026, Dorman Products, Inc. (NASDAQ:DORM) reported consolidated net sales of $529 million, an increase of 4% compared to Q1 2025. While we acknowledge the potential of Dorman Products, Inc. (NASDAQ:DORM) 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 Dorman Products, Inc. (NASDAQ:DORM) and shared the list of best 52-week low NASDAQ stocks to buy. In addition, please check out our hedge fund investor letters Q1 2026 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.