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Night Watch Investment Management, an investment management firm, released its fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. Despite experiencing high volatility in individual stocks during Q4, the fund finished the quarter approximately flat. Overall, the firm is pleased with how 2025 unfolded. Like 2024, the results were broad-based and did not rely on any single security. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Night Watch Investment Management highlighted stocks such as Distribution Solutions Group, Inc. (NASDAQ:DSGR). Headquartered in Fort Worth, Texas, Distribution Solutions Group, Inc. (NASDAQ:DSGR) is a specialty distribution company. On January 6, 2026, Distribution Solutions Group, Inc. (NASDAQ:DSGR) stock closed at $28.54 per share. One-month return of Distribution Solutions Group, Inc. (NASDAQ:DSGR) was 0.00%, and its shares lost 18.53% of their value over the last 52 weeks. Distribution Solutions Group, Inc. (NASDAQ:DSGR) has a market capitalization of $1.321 billion.
Night Watch Investment Management stated the following regarding Distribution Solutions Group, Inc. (NASDAQ:DSGR) in its fourth quarter 2025 investor letter:
“Distribution Solutions Group, Inc. (NASDAQ:DSGR), a specialty distribution company, performed largely in line with our expectations despite the slight move down in share price. US industrial activity remains in contraction, but DSGR has seen their organic growth accelerate to 6%. Over the last two years their management team has undertaken various business optimization steps, which should come to light when US industrial activity normalizes.”
Distribution Solutions Group, Inc. (NASDAQ:DSGR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 14 hedge fund portfolios held Distribution Solutions Group, Inc. (NASDAQ:DSGR) at the end of the third quarter, up from 11 in the previous quarter. Distribution Solutions Group, Inc.’s (NASDAQ:DSGR) consolidated revenue for the third quarter of 2025 increased 10.7% to $518 million. While we acknowledge the potential of Distribution Solutions Group, Inc. (NASDAQ:DSGR) 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.