Joe LeRoy, Relationship Manager, and Liza Baran, Director of Shareholder Services & Operations, highlight FAM Funds services and the direct access investors have to our team.
William Preston, Director of Research & Portfolio Manager, reflects on 2025’s stock market drivers and shares 2026 insights.
William Preston, Director of Research & Portfolio Manager, reflects on the stock market drivers in 2025 and shares insights
for 2026.
Joe LeRoy, Relationship Manager, and Liza Baran, Director of Shareholder Services & Operations, highlight FAM Funds services and the direct access investors have to our team.
FAM Value Fund Annual Letter
FAM Value Fund
Annual Letter
FAM Small Cap Fund
Annual Letter
FAM Dividend Focus Fund Annual Letter
FAM Dividend Focus Fund
Annual Letter
In this video from a recent speaking engagement, retired Fenimore CIO, John Fox, CFA®, shares these five Fenimore lessons on long-term investing.
CEO Anne Putnam and Founder & Executive Chairman Tom Putnam explore Fenimore’s enduring commitment to investment excellence through:
CEO Anne Putnam and President Christian Snyder discuss Fenimore’s:
Dear Fellow Investor,
The late author and naturalist Hal Borland wrote, “Year’s end is neither an end nor a beginning but a going on, with all the wisdom that experience can instill in us.”
As the Fenimore team enters 2025’s final quarter, we are taking the wisdom we have accumulated over the first nine months of this year ― and across the last five-plus decades ― and putting it to work every day on our investors’ behalf. We continue with our mission of seeking to protect and grow your capital over the long term, and we are pleased and humbled to have you with us on the journey.
Maybe not gangbusters like we hoped, but through three quarters the stock market and economy have both performed well, overall, in a challenging environment.
Stocks and bonds are up. The current annual return on cash equivalents, like money market accounts and treasury bills, is healthy. Furthermore, publicly traded real estate investment trusts have sound performance in general.
Adding to our encouragement, as Fenimore’s research team travels the country, we are routinely hearing our holdings’ management teams talk positively about earnings growth and the reinvestments they are making ― both in their own company and through acquisitions. These businesses are the compass we primarily focus on as we navigate the always unpredictable, occasionally turbulent world of investments and they have helped guide us successfully for more than a half-century.
At Fenimore, we ask ourselves big-picture questions every day as we strive to make the most informed investment decisions:
However, the most important question is at the company level:
What are the companies in which we invest doing to stay strong and keep growing
no matter the answers to those macro questions?
Investing in what we believe are quality businesses with strong financials ― including significant free cash flow generation, high profitability, and manageable debt ― has been the foundation of Fenimore’s investment philosophy since day one. And a key factor in these businesses’ success is always an astute leadership team that anticipates and prepares for almost every possibility.
Fenimore’s research analysts are in touch with our companies, and others we are considering, on a regular basis to verify our quality assessments. Sometimes it is a phone check-in. Other times it is a lengthy visit with the C-suite or on the factory floor. In each instance, our message is the same: show us what you are doing to grow earnings, outsmart the competition, minimize debt, and create value for shareholders ― even in times of uncertainty.
We are pleased to say that we like what we are hearing and this gives us a positive long-term outlook.
Please do not hesitate to connect with us about your investments and financial goals in our Cobleskill or Albany office, or from the comfort of your own home. Call 800-932-3271 or email us at info@fenimoreasset.com.
Thank you for your confidence in us.
Sincerely,
John D. Fox, CFA®
CHIEF INVESTMENT OFFICER
John Fox, Chief Investment Officer (CIO), is retiring in December after a successful career at Fenimore of nearly 30 years. His professional and personal contributions have made a positive impact on our investors, firm, and community. We hope that John enjoys his well-deserved retirement and express our heartfelt gratitude for his dedicated service!
FOCUSED ON YOU
Fenimore Founder and Executive Chairman Tom Putnam built the framework for a long-term succession plan years ago to ensure the continuity of our investment philosophy and investor experience for decades to come. Fenimore’s succession planning is thoughtful, enduring, and seamless ― always keeping our investors’ best interests in mind.
When associates retire, our highly collaborative process keeps operations running smoothly. Each of the three investment strategy teams (Value, Dividend Focus, and Small Cap) works together as a cohesive unit. They implement our market-tested approach in pursuit of performance excellence, just as they did during John’s time as CIO. What this means is that the teams who pick our stocks remain the same.
Fenimore’s research analysts include three astute industry veterans of more than 30 years as well as generations of talented professionals. We look forward to sustaining our collegial environment as we diligently seek to grow your assets over the long term.
This letter is intended for FAM Shareholders and is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus for the FAM Value Fund, FAM Dividend Focus Fund and FAM Small Cap Fund. Past performanceis not indicative of future results. Investment returns may fluctuate: the value of your investment upon redemption may be more or less than the initial amount invested. Please read the prospectus or summary prospectus for more complete details, including investment objectives, risk considerations and expenses, before you invest. FAM Funds are distributed by Fenimore Securities, Inc., Cobleskill, NY 12043, 800.932.3271. Current performance numbers are available at fenimoreasset.com.
This presentation may contain statements based on the current beliefs and expectations of Fenimore’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Any references herein to any of Fenimore’s past or present investments, portfolio characteristics, or performance, have been provided for illustrative purposes only. It should not be assumed that these investments were or will be profitable or that any future investments will be profitable or will equal the performance of these investments. There can be no guarantee that the investment objectives of Fenimore will be achieved. Any investment entails a risk of loss. Unless otherwise noted, information included herein is presented as of the date indicated on thecover page and may change at any time without notice. Fenimore Asset Management Inc. is an SEC registered investment adviser; however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made.
“The Fenimore view of Berkshire is that it’s a successful conglomerate focused on great underwriting in insurance and portfolio management of the balance sheet. These are the tenets that we look for in holdings at Fenimore, because strong operating businesses with great management teams parallel the company stock holdings that we think about for your portfolios.”
– Anne Putnam, CEO
Dear Fellow Investor,
At a time when there is uncertainty in the U.S. economy — and, by extension, in the stock market — our Fenimore team remains keenly focused on being as certain as we can that the companies we invest in are ready for whatever the coming months may bring.
Investing in what we deem to be quality businesses that meet our exacting criteria has been Fenimore’s cornerstone since our founding in the midst of a recession 51 years ago. Times always change, and currently it’s a fast-paced environment, but we are on top of the situation and continue to maintain our unchanging principles as we execute our plan.
THE NATIONAL ECONOMIC PICTURE
It’s fair to say that the 2025 outlook for America’s economic picture is now different from what investors expected as the new year began. At that time, the overall consensus was that the Federal Reserve would continue to lower short-term interest rates as inflation subsided; corporate earnings would grow more than 10% this year; and the new administration’s policies of lower taxes and less regulation would ignite business growth and boost the stock market.
Instead, inflation remains stubborn at approximately 3%, where it’s been since 2023, and short-term interest rate reductions are stalled. Corporate earnings projections are being revised down (still solid but below expectations), partially due to the potential impact of tariffs. And, as of this writing, the S&P 500 Index was hovering around the same place as on Election Day.
The on-again/off-again prospect of tariffs on goods from China, Canada, and Mexico — and the uncertainty those prospects are creating among businesses and consumers — will likely slow economic growth initially, which may cause the stock market to decline.
This is not intended as a critique of the short- or long-term merits of the administration’s economic-related actions, especially since it’s only been a few months. It’s just the facts of where things stand today and another reason I often say, “No one can predict the stock market.”
STAYING FOCUSED ON QUALITY BUSINESSES
So, what is our team doing about the uncertainty? We’re seeking to ensure that the firms we invest in are ready to address it. Fenimore’s investment research analysts don’t limit our due diligence to the quarterly earnings calls that publicly traded companies are required to hold with droves of investors, analysts, and the news media. We talk privately and frequently with the leadership of our businesses — in person whenever possible — so we can see their operations firsthand, have an in-depth understanding of their strategies, and ask the hard questions that either reinforce our confidence in them or give us pause about future investments.
Our most recent meetings have found our holdings to be strong and optimistic overall. Tariff issues are certainly a primary topic, but I’m pleased to report that we’ve found our companies universally equipped to weather any related storms. Due to tariff hikes during the administration’s first term, COVID, and a growing fear of doing business in China, most holdings have a diverse supplier base and the ability to adapt. They are much more prepared for change this time around.
For example, only one of our companies has projected a reduction in earnings as a result of tariffs; however, through a series of tactical steps, they should be able to mitigate this estimated decline by two-thirds. Another firm showed us how they reduced imports from China in recent years to minimize tariff impacts. These imports were 50% of their product mix, but now are just 16%.
These are the types of strategic moves we expect from our holdings as we aim to maximize your return and minimize your risk.
INVESTING FOR THE LONG TERM
As always in times of uncertainty, Fenimore encourages you to stay aware of present-day economic and market conditions, but to keep your focus on the future and stay the course. Meanwhile, we remain dedicated to investing in quality businesses that we believe can create value for our investors over the long term while navigating the everchanging landscape — just as we have since 1974.
Our associates are available to speak with you about your investments to ensure they are aligned with your life goals. If you have questions or concerns, we encourage you to contact us at 800-932-3271 or info@fenimoreasset.com. For those of you who live in our region, please stop in or schedule a time to meet at our home office in Cobleskill or branch office in Albany, which just celebrated a successful one-year anniversary.
Thank you for your confidence in us.
Sincerely,
John D. Fox, CFA®
CHIEF INVESTMENT OFFICER
This letter is intended for FAM Shareholders and is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus for the FAM Value Fund, FAM Dividend Focus Fund and FAM Small Cap Fund. Past performanceis not indicative of future results. Investment returns may fluctuate: the value of your investment upon redemption may be more or less than the initial amount invested. Please read the prospectus or summary prospectus for more complete details, including investment objectives, risk considerations and expenses, before you invest. FAM Funds are distributed by Fenimore Securities, Inc., Cobleskill, NY 12043, 800.932.3271. Current performance numbers are available at fenimoreasset.com.
This presentation may contain statements based on the current beliefs and expectations of Fenimore’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Any references herein to any of Fenimore’s past or present investments, portfolio characteristics, or performance, have been provided for illustrative purposes only. It should not be assumed that these investments were or will be profitable or that any future investments will be profitable or will equal the performance of these investments. There can be no guarantee that the investment objectives of Fenimore will be achieved. Any investment entails a risk of loss. Unless otherwise noted, information included herein is presented as of the date indicated on thecover page and may change at any time without notice. Fenimore Asset Management Inc. is an SEC registered investment adviser; however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made.
Fenimore CEO, Anne Putnam, speaks to Fenimore’s 51 years of experience managing market cycles.
“Our analysts, our team of ten would tell you that this is normal. A correction happens and it gives us an opportunity to invest in our portfolios. We have the experience of over 51 years of history to make sure that we can put portfolios together that are meaningful for you and for us, so that you can sleep at night and have trust in us as your investment partner in order to maintain and mitigate the downturns we are experiencing today.” – Anne Putnam, CEO