FPA Queens Road Small Cap Value Fund on Vishay Intertechnology, Inc.
Thesis
Vishay manufactures passive components and discrete semiconductors used across numerous industrial and electronic applications. New management began investing aggressively in growth just as the industry entered a downturn, temporarily depressing margins and free cash flow while the share price fell sharply. Revenue and bookings rebounded strongly in 2026 and incremental data-center exposure added another growth driver. The fund benefited substantially from the recovery but trimmed repeatedly as the valuation expanded from roughly 0.5 times sales toward three times sales. After the subsequent pullback it remains comfortable holding a smaller position while waiting to see whether the cultural reset and investment program create durable improvements.
“The jury is still out on Vishay's cultural reset and investment program, but the price has come back down and we are comfortable continuing to hold a less than 2% position.”
Key risks
- The cultural reset and growth investments may not generate adequate returns
- The business remains highly cyclical
- Valuation expanded dramatically during the 2026 rally