SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun Small Cap Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the strategy returned -11.32% on a gross basis (-11.48% net) compared to a -9.48% return for the Russell 2000 Index and -7.74% for the Russell 2000 Value Index. The strategy returned -12.55% on a gross basis (-13.21% net) for the trailing twelve months compared to -4.01% and -3.12% respectively for the indexes over the same period. In addition, please check the top 5 holdings of the strategy to know its best pick in 2025.

In its first-quarter 2025 investor letter, SouthernSun Small Cap Strategy highlighted stocks such as Extreme Networks, Inc. (NASDAQ:EXTR). Extreme Networks, Inc. (NASDAQ:EXTR) develops and markets network infrastructure equipment and related software. The one-month return of Extreme Networks, Inc. (NASDAQ:EXTR) was -5.59%, and its shares gained 8.14% of their value over the last 52 weeks. On April 25, 2025, Extreme Networks, Inc. (NASDAQ:EXTR) stock closed at $12.49 per share with a market capitalization of $1.658 billion.

SouthernSun Small Cap Strategy stated the following regarding Extreme Networks, Inc. (NASDAQ:EXTR) in its Q1 2025 investor letter:

“Extreme Networks, Inc. (NASDAQ:EXTR) was a new addition to the Small Cap strategy in the first quarter of 2025. Extreme Networks is one of the top 3 players in the networking industry. While the industry has been dominated by Cisco and Hewlett Packard (HPE), who together have >60% share, both Cisco and HPE have developed their product/ architecture with “data-centers” in mind. However, EXTR has taken a different tact and developed their architecture with a distributed environment as their target market. We believe EXTR has the opportunity to grow revenues in the low double-digit range and disrupt the industry due to product, distribution, and pricing advantages.