Specialty Chemicals Player Soars 111% While Major Fund Adjusts Its $35M Exposure

2025-12-31 15:20:17

The Stock’s Extraordinary Run

Perimeter Solutions (NYSE: PRM) has delivered jaw-dropping returns to shareholders, with the stock up 111% over the trailing twelve months—a performance that dwarfs the S&P 500’s modest 15% gain in the same window. As of the latest trading session, shares were priced at $28.08, reflecting a market capitalization of $4.15 billion. Yet amid this winning streak, at least one institutional investor opted to pare down its concentrated bet.

When Winners Get Too Big: East Coast Asset Management’s Moves

Massachusetts-based East Coast Asset Management sold off 497,847 shares of Perimeter Solutions during the third quarter, according to an SEC filing dated November 14. The reduction trimmed approximately $6.40 million in position value from the prior period.

Despite the pullback, the fund remains substantially exposed. As of September 30, the fund held nearly 1.6 million shares valued at $35.24 million—still representing 11.04% of its 13F reportable assets. Across its 68 U.S. equity positions totaling $319.18 million, the Perimeter Solutions holding ranks as the fund’s second-largest investment, behind a $50.07 million stake in Google (NASDAQ: GOOGL).

The fund’s top five holdings paint a clear picture of its mega-cap tech and industrial tilt:

GOOGL (Alphabet): $50.07 million (15.7% of AUM)
PRM (Perimeter Solutions): $35.24 million (11.0% of AUM)
TDG (TransDigm Group): $30.83 million (9.7% of AUM)
META (Meta Platforms): $30.75 million (9.6% of AUM)
TSLA (Tesla): $30.43 million (9.53% of AUM)

Business Momentum Remains Intact

The fund’s decision to reduce exposure should be interpreted carefully. Perimeter Solutions continues to demonstrate operational strength. In the third quarter, revenue climbed 9% year-over-year to $315.4 million, while adjusted EBITDA similarly advanced 9% to $186.3 million. The Fire Safety segment led the charge, posting a 13% jump in segment EBITDA.

Year-to-date performance has been even more impressive, with adjusted EBITDA up 20% and adjusted earnings per share reaching $0.82, compared to $0.75 in the prior year. The company’s portfolio of fire retardants, firefighting foams, and lubricant additives—marketed under brands like PHOS-CHEK, FIRE-TROL, AUXQUIMIA, SOLBERG, and BIOGEMA—continues to resonate with federal, state, and commercial buyers across the U.S., Germany, and beyond.

Portfolio Recalibration, Not Capitulation

Here’s the nuance that matters: selling $6 million worth of stock after a 111% rally isn’t an exit signal. It’s disciplined portfolio management. The fund maintained an 11% portfolio weighting in Perimeter Solutions even after the reduction, keeping it as the second-largest position. That’s meaningful commitment.

After a stock doubles, trimming a slice helps rebalance concentration risk without abandoning the underlying investment thesis. For long-term investors, that’s the takeaway—this wasn’t panic selling or a loss of conviction. This was the fund saying, “We’re right about this company, but we’ve built too large of an exposure to let it run unchecked.” That’s textbook risk management in a winner.

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.