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Crossroads Capital LLC, an investment management firm, published its first-quarter 2026 investor letter. You can download a copy here. The Fund increased by 4.2% net of fees and expenses during the quarter. Since its founding, the fund has compounded at a gross rate of 21.3% and a net rate of 17.1%.  By the end of March 20206, the fund’s overall non-delta adjusted gross and net exposures were 114.1% and 73.3%, respectively. The letter noted that the stable market trends from 20205 were broken by geopolitical tensions linked to Trump’s increasingly unpredictable foreign policy, causing the S&P 500 to fall about 4.3%. Nonetheless, Q1’s fundamentals aligned with broader trends. Overall, the firm is pleased with its portfolio, maintaining its position as special situations begin to accelerate. In addition, please check the Fund’s top five holdings to know its best picks in 2026.

In its first-quarter 2026 investor letter, Crossroads Capital highlighted stocks like FTAI Aviation Ltd. (NASDAQ:FTAI) as a notable contributor. FTAI Aviation Ltd. (NASDAQ:FTAI) is an aviation company that owns, acquires, and sells aviation equipment. On May 22, 2026, FTAI Aviation Ltd. (NASDAQ:FTAI) closed at $252.13 per share. One-month return of FTAI Aviation Ltd. (NASDAQ:FTAI) was 9.68%, and its shares gained 120.05% over the past 52 weeks. FTAI Aviation Ltd. (NASDAQ:FTAI) has a market capitalization of $25.86 billion.

Crossroads Capital stated the following regarding FTAI Aviation Ltd. (NASDAQ:FTAI) in its Q1 2026 investor letter:

"A year ago, FTAI Aviation Ltd. (NASDAQ:FTAI) sat in our special situations bucket, navigating a coordinated short-seller campaign that sent the stock into the low-$80s and created an entry that looked uncomfortable in real time, but had the potential to be a long-term holding. Our original thesis was borne out, but also evolved in advantageous ways, so the company graduated from special situation to emerging compounder.

FTAI is a leading MRO franchise for the CFM56 and is transforming into a capital-light, high-visibility model with its Strategic Capital Initiative (SCI), protected by an irreplaceable competitive advantage in PMA parts.

As a reminder, FTAI captures the best economics in aftermarket aviation not by passively leasing engines, but by operating a vertically-integrated platform (Module Factory + SCI) that manufactures “green time” at a structurally lower cost than OEM pathways. “Green time” is simply the remaining usable life on an engine or component before major maintenance; FTAI creates it by tearing down older engines and using proprietary PMA parts and USM components to rebuild them with serviceable modules (fan/core/LPT) that can be swapped in days rather than waiting months for shop visits. The result is both higher aircraft and engine uptime for customers in a supply constrained market and high-margin Aerospace Products revenue, itself layered on top of leasing, creating an increasingly durable flywheel as scale and parts availability compound. …” (Click here to read the full text)

FTAI Aviation Ltd. (NASDAQ:FTAI) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 56 hedge fund portfolios held FTAI Aviation Ltd. (NASDAQ:FTAI) at the end of the fourth quarter, up from 51 in the previous quarter. While we acknowledge the potential of FTAI Aviation Ltd. (NASDAQ:FTAI) 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 FTAI Aviation Ltd. (NASDAQ:FTAI) and shared the list of unstoppable stocks to buy in 2026. 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.