Middle Coast Investing, an investment advisor firm, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The third quarter was favorable for Middle Coast Investing. Its collective portfolio outperformed the S&P 500 and is ahead of benchmarks year to date. In Q3 2025, the US Portfolios returned 9.6% compared to 7.8% for the S&P 500. It’s Core U.S. portfolios returned 10% while the Russell 2000 returned 12%, the S&P 600 returned 8.7% and the Nasdaq generated 11.2% for the same period. Also, its European Portfolios appreciated by 5.5%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Middle Coast Investing highlighted stocks such as Portillo’s Inc. (NASDAQ:PTLO). Portillo’s Inc. (NASDAQ:PTLO) is a US-based restaurant operator. The one-month return of Portillo’s Inc. (NASDAQ:PTLO) was -0.77%, and its shares lost 47.86% of their value over the last 52 weeks. On October 6, 2025, Portillo’s Inc. (NASDAQ:PTLO) stock closed at $6.47 per share, with a market capitalization of $465.229 million.

Middle Coast Investing stated the following regarding Portillo’s Inc. (NASDAQ:PTLO) in its third quarter 2025 investor letter:

“We also got Portillo’s Inc. (NASDAQ:PTLO) wrong, and quickly. The company had a disappointing Q2 report, lowering guidance. But I bought more shares, as the company was sticking to its strategy and its issues – especially getting a foothold with its newer restaurants in Texas – seemed plausible and solvable.

Portillo’s Inc. (NASDAQ:PTLO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 26 hedge fund portfolios held Portillo’s Inc. (NASDAQ:PTLO) at the end of the second quarter, up from 17 in the previous quarter. In the second quarter of 2025, Portillo’s Inc. (NASDAQ:PTLO) reported revenue of $188.5 million, reflecting an increase of $6.6 million compared to Q2 2024. While we acknowledge the potential of Portillo’s Inc. (NASDAQ:PTLO) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.