How FPA Queens Road Identified Value in EPlus (PLUS)

First Pacific Advisors’ FPA Queens Road Small Cap Value Fund has consistently demonstrated its investment acumen by selecting quality companies trading at reasonable valuations. In its latest quarterly review, the fund spotlighted one particularly compelling addition to its portfolio: EPlus Inc. (NASDAQ:PLUS), a Virginia-based IT solutions provider that exemplifies the fund’s disciplined investment approach.

The Strategic Logic Behind Queens Road’s Selection

The FPA Queens Road Small Cap Value Fund’s fourth-quarter 2025 letter reveals a fund focused on a specific investment thesis: acquiring quality businesses at attractive prices while protecting portfolios during market volatility. This approach proved particularly effective during the first half of 2025, when markets experienced weakness and uncertainty. The fund delivered a 13.36% return for the full year, narrowly trailing the Russell 2000 Value Index’s 12.59% gain.

However, Q4 2025 presented challenges when market sentiment shifted dramatically. The period favored speculative and low-quality equities, causing the Queens Road fund to decline 0.36% compared to the index’s 3.26% gain. Despite this quarter’s headwinds, the fund’s longer-term positioning in fundamentally sound businesses underscored its commitment to value preservation over speculative exposure.

Why EPlus Attracted Queens Road’s Attention

EPlus Inc. represents precisely the type of investment the Queens Road strategy targets. Headquartered in Herndon, Virginia, the company operates as a value-added reseller and IT consultant helping enterprises optimize technology spending and supply chain operations. The fund’s investment committee highlighted several compelling attributes: the company benefits from sound management, scores highly on the fund’s internal quality assessment framework, and trades at a discount relative to its growth profile and operational quality.

According to the official fund letter, management noted: “The company is well run in our opinion and scores highly on our quality dashboard. Adjusting for ePlus’ significant cash holdings, we think the company is inexpensive for its growth and quality profile.” This analysis reflects the Queens Road team’s focus on quantifiable quality metrics rather than market sentiment.

Recent Market Performance and Positioning

As of mid-February 2026, EPlus traded near $83.91 per share, representing a market capitalization of approximately $2.1 billion. The stock delivered mixed short-term results—declining 7.32% over the preceding month while gaining 17.89% over the past 52 weeks. This volatility underscores the type of market dislocations that value-oriented investors like Queens Road exploit for long-term gains.

Institutional interest in EPlus remains meaningful, with 19 hedge fund portfolios maintaining positions as of the third quarter, up from 17 the prior period. The increase in holdings suggests growing recognition of the company’s value proposition within the broader investment community.

Looking Forward: Queens Road’s Investment Thesis

The FPA Queens Road Small Cap Value Fund’s approach centers on identifying overlooked opportunities in small-cap markets where quality and valuation mismatches create opportunity. EPlus exemplifies this opportunity set—a operationally sound enterprise managing enterprise IT solutions with substantial cash balances, yet trading below the valuation multiples typically commanded by comparable growth-quality profiles.

While short-term volatility continues to characterize small-cap markets, the fund’s disciplined approach of acquiring quality at reasonable prices remains its anchor strategy for generating long-term investor returns.