In the second quarter of 2026, portfolio manager Steven Scruggs of the FPA Queens Road Small Cap Value Fund made a significant portfolio adjustment, with changes to his holdings of Vontier Corp (NYSE: VNT) having the most substantial impact on the fund's composition.
Scruggs has been with Bragg Financial Advisors since 1999, serving as a portfolio manager for the FPA Queens Road fund and also acting as the firm's director of research. His investment philosophy follows Benjamin Graham's value investing principles, employing a bottom-up, fundamental analysis approach to identify small and mid-sized companies trading below their intrinsic value.
Vontier Corp is a global industrial technology company that provides technology solutions for connecting, managing, and scaling the mobility ecosystem. Its operations span three main segments: Environmental & Fueling Solutions, Mobility Technologies, and Repair Solutions. The company delivered solid financial results for the first quarter of 2026, with sales reaching $750.6 million, a 1.3% increase year-over-year. Core sales grew by 1.7%, driven primarily by robust demand for convenience retail solutions, including fueling systems, environmental systems, and payment technology. Net income for the quarter was $94.3 million, with adjusted diluted earnings per share of $0.80. The company reaffirmed its full-year 2026 guidance, forecasting adjusted diluted earnings per share between $3.35 and $3.50, and maintaining an expectation of approximately 95% free cash flow conversion. Management has stated that demand trends in the convenience retail end market remain positive, expressing confidence in the company's outlook for the year.
Public filings show that the fund managed by Scruggs also holds positions in peers of Vontier Corp, including Arrow Electronics (ARW), RLI Corp (RLI), and JBT Marel Corporation (JBTM). These holdings collectively form the fund's core allocation within the mid-cap industrial sector.
The FPA Queens Road fund, managed by Scruggs, employs a bottom-up, deep-dive research methodology. It constructs its portfolio by considering a combination of quantitative and qualitative analysis, balance sheet quality, valuation levels, management capability, and industry outlook. His significant allocation to Vontier Corp reflects a recognition of the company's competitive position and growth prospects within the mobility technology space.