Here’s Why SouthernSun Decided to Exit Its Long-Term Holding in Dycom Industries (DY)

1 day ago 3

Soumya Eswaran

Mon, March 2, 2026 astatine 10:01 AM CST 3 min read

SouthernSun Asset Management, LLC, an concern absorption firm, released its “SouthernSun Small Cap Strategy” fourth-quarter 2025 capitalist letter. A transcript of the missive tin beryllium downloaded here. During the quarter, the Small Cap Composite returned -2.45% connected a gross ground (-2.64% net) compared to 2.19% for the Russell 2000 Index and 3.26% instrumentality for the Russell 2000 Value Index. The Composite returned 6.21% connected a gross ground (5.40% net) implicit the trailing 12 months compared to 12.81% and 12.59% for the indexes, respectively. The missive highlighted the economical lessons learned during the lipid terms illness of 2014-15. Initially seen arsenic a affirmative improvement for the planetary economy, the diminution successful lipid prices aboriginal revealed underlying weaknesses, starring to broader economical impacts beyond the vigor sector. The writer compares this to the existent concern with artificial quality (AI), cautioning that portion AI is present a cardinal facet of economical readying and decision-making, its associated risks indispensable beryllium cautiously analyzed. As the marketplace approaches 2026, the concern scenery is shaped by assorted scenarios, including valuation compression and overcapacity successful AI infrastructure, alternatively than inevitable outcomes. SouthernSun Asset Management maintains a disciplined, humble attack focused connected intrinsic worth and is optimistic astir the aboriginal but remains alert of humanities lessons. In addition, delight cheque the Strategy’s apical 5 holdings to cognize its champion picks successful 2025.

In its fourth-quarter 2025 capitalist letter, SouthernSun Small Cap Strategy highlighted stocks similar Dycom Industries, Inc. (NYSE:DY). Based successful Palm Beach Gardens, FloridaDycom Industries, Inc. (NYSE:DY) provides specialty declaration services to telecommunication infrastructure and inferior industries. On February 27, 2026, Dycom Industries, Inc. (NYSE:DY) banal closed astatine $420.02 per share. One-month instrumentality of Dycom Industries, Inc. (NYSE:DY) was 162.83%, and its shares gained 2.83% implicit the past 52 weeks. Dycom Industries, Inc. (NYSE:DY) has a marketplace capitalization of $12.682 billion.

SouthernSun Small Cap Strategy stated the pursuing regarding Dycom Industries, Inc. (NYSE:DY) successful its 4th fourth 2025 capitalist letter:

"During the 4th fourth of 2025 we exited positions successful Dycom Industries, Inc. (NYSE:DY) and Timken Inc. (TKR) successful the Small Cap Strategy. Dycom Industries Inc. (DY) After a agelong and palmy ownership of DY, we decided to exit our presumption successful the 4th fourth successful favour of much charismatic opportunities. The concern is experiencing beardown request from net providers for fibre deployment, but we judge overmuch of the caller valuation enlargement is being driven by AI exuberance. Although fibre connections to caller AI information centers volition beryllium an incremental accidental for DY, we bash not expect AI related fibre request to beryllium worldly to the wide worth of the business. Furthermore, we were skeptical of the caller CEO’s determination to marque a large, ~$2B acquisition of an electrical contractor with ~90% of its revenues from information halfway projects. Historically, DY had been disciplined with its absorption connected wireline and wireless telecommunications, but this acquisition marked a important departure from this discipline."

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