Curreen Capital's 'Ugly Duckling' Strategy Pays Off, Spotlights Advance Auto Parts
Curreen Capital, an investment management firm known for its focus on deeply undervalued companies, closed out 2025 with robust gains, crediting its so-called "ugly duckling" investment philosophy. The firm's fourth-quarter letter to investors, released this week, revealed a 10.5% return for Q4 and a 30.97% gain for the full year.
The strategy hinges on identifying fundamentally sound, well-managed businesses trading at discounted prices—often overlooked or shunned by the broader market. One such holding singled out in the letter is Advance Auto Parts, Inc. (NYSE: AAP). The Raleigh-based automotive aftermarket parts provider saw its shares surge nearly 24% in the past month, a stark contrast to its essentially flat performance over the preceding 52 weeks. The stock closed at $48.01 on January 30, 2026, giving the company a market capitalization of approximately $2.88 billion.
"Advance Auto Parts fits our criteria perfectly," the letter stated. "It operates in a stable, necessary industry but has faced operational headwinds and sentiment-driven selling that have masked its underlying value. Our thesis is that management's turnaround efforts and cost controls are not yet reflected in the price."
The spotlight on AAP comes amid a challenging environment for traditional retail and auto parts chains, which are navigating supply chain normalization and competitive pressures from online retailers. Curreen's endorsement suggests a belief that AAP's extensive physical store network and professional installer base remain a durable competitive moat.
Notably, hedge fund interest appears tempered. According to data cited by Curreen, 32 hedge funds held AAP at the end of Q3 2025, down from 34 the previous quarter. The firm also pointed out that AAP did not rank among the most popular hedge fund stocks, suggesting its "ugly duckling" status persists.
Investor Reactions:
"Finally, someone is talking sense about AAP," said Michael Rourke, a portfolio manager at a mid-sized value fund. "The market has been myopically focused on quarterly same-store sales misses and ignored the solid balance sheet and the brand equity in the professional segment. Curreen is right; this is a classic mean-reversion play."
"This 'ugly duckling' narrative is a convenient excuse for poor performance," countered Lisa Tran, an independent financial analyst known for her blunt commentary. "AAP has consistently underwhelmed for years. A one-month pop doesn't erase systemic issues. Calling it a 'good company' while its stock goes nowhere for a year is spin, not analysis. Investors should demand execution, not fairy tales."
"It's an interesting case study in contrarian investing," noted David Gibson, a finance professor. "Curreen's success with this strategy asks us to consider whether the market's obsession with growth and AI has created pockets of extreme value in 'boring' sectors like automotive retail. The risk, of course, is that these companies remain undervalued for a very long time."
Curreen Capital's full letter includes analysis of its top five holdings and further rationale for its 2025 portfolio selections.