Sands Capital, an investment management company, released its “Sands Capital Select Growth Strategy” Q3 2025 investor letter. A copy of the letter can be downloaded here. U.S. large-cap growth equities continued to recover from a sharp sell-off in early April. Strong corporate earnings, investor enthusiasm around artificial intelligence (AI), and growing expectations for Federal Reserve policy easing drove the robust gains. The portfolio returned 6.3% in the quarter, outperforming the benchmark Russell 1000 Growth Index’s 10.5% gain. You can check the fund’s top 5 holdings to know more about its best picks for 2025.
In its third-quarter 2025 investor letter, Sands Capital Select Growth Strategy highlighted stocks such as TAT Technologies Ltd. (NASDAQ:TATT). TAT Technologies Ltd. (NASDAQ:TATT) provides solutions and services to the commercial and military aerospace and ground defense industries. The one-month return of TAT Technologies Ltd. (NASDAQ:TATT) was -11.81%, and its shares gained 73.27% of their value over the last 52 weeks. On November 26, 2025, TAT Technologies Ltd. (NASDAQ:TATT) stock closed at $38.24 per share, with a market capitalization of $495.232 million.
Sands Capital Select Growth Strategy stated the following regarding TAT Technologies Ltd. (NASDAQ:TATT) in its third quarter 2025 investor letter:
“TAT Technologies Ltd. (NASDAQ:TATT) was the top contributor in the long book during the third quarter of 2025. As an underfollowed aerospace Original Equipment Manufacturer (“OEM”) and Maintenance, Repair, and Operations (“MRO”) service provider, TATT operates in four niche categories: thermal solutions (~41% of revenues), auxiliary power units (~27%), landing gear (~5%) and leasing & trading (~14%). We believe the landing gear segment is entering into a major MRO cycle, and TATT already has two strategic agreements in place with Embraer for their E170 and E175 aircraft and Gulfstream for their G400 and G500 business jets. We believe the most important growth segment is the auxiliary power units (“APUs”), particularly for the B737 and A320 family of aircraft and the B777. According to the company, these “platforms” have a Total Addressable Market (“TAM”) of approximately $2.5 billion, and TAT Technologies has less than 1% share today with a goal of reaching 5 to 10% share. The company’s position in the industry is supported by a license agreement with Honeywell, the OEM for the power units. Although there are a couple non-licensed APU MRO providers, TATT becomes Honeywell’s approved provider of aftermarket service and support. Recent results support our multi-year thesis on the name with Q2 2025 revenues increasing 18% year-on-year, and the backlog increasing $85m to reach $524m or roughly 3x current yearly sales. Gross margins have sequentially improved for four straight quarters and EBITDA margins reached 14% in Q2. We believe the market underestimates TATT’s multi-year growth potential. We think our $39m of FY27 EBITDA is a conservate estimate. At a reasonable 15x multiple, fair value is in the low $50s per share and we expect TATT to leverage its platform for further business wins and acquisitions that will add more value to the stock as it develops.”
