Palm Valley Capital Management, an investment management firm, released the “Palm Valley Capital Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, Palm Valley Capital Fund increased 2.43% compared to a 10.13% and 8.48% return for the S&P SmallCap 600 Index and the Morningstar Small Cap Index, respectively. During the quarter the equity positions in the Fund increased by 8.32% slightly below small-cap benchmarks. Cash equivalents comprised 81.5% of the fund’s assets at the period's end. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Palm Valley Capital Fund highlighted stocks like Nathan’s Famous, Inc. (NASDAQ:NATH), in the third quarter 2024 investor letter. Nathan’s Famous, Inc. (NASDAQ:NATH) operates in the food service industry and owns and franchises restaurants. The one-month return of Nathan’s Famous, Inc. (NASDAQ:NATH) was 4.71%, and its shares gained 15.88% of their value over the last 52 weeks. On October 3, 2024, Nathan’s Famous, Inc. (NASDAQ:NATH) stock closed at $80.50 per share with a market capitalization of $328.812 million.

Palm Valley Capital Fund stated the following regarding Nathan’s Famous, Inc. (NASDAQ:NATH) in its Q3 2024 investor letter:

"During the quarter, we completely sold three positions: John Wiley & Sons (ticker: WLY), Nathan’s Famous, Inc. (NASDAQ:NATH), and Equity Commonwealth (ticker: EQC). Nathan’s Famous had been a tiny position in the Fund for the past couple of years. The shares rose shortly after our initial purchase in 2022, and since then the discount has not been sufficient for us to expand the holding to a more normal exposure. Nathan’s has delivered strong profitability driven by its licensing deal with Smithfield. Since it is primarily a royalty business, Nathan’s earns ample cash flow, which it recently used to pay off its debt."

A grill master flipping the iconic hotdogs of Nathan's Famous brand.

Nathan’s Famous, Inc. (NASDAQ:NATH) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 6 hedge fund portfolios held Nathan’s Famous, Inc. (NASDAQ:NATH) at the end of the second quarter which was 8 in the previous quarter. While we acknowledge the potential of Nathan’s Famous, Inc. (NASDAQ:NATH) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.