When a $35 Million Position Gets Trimmed: What Perimeter Solutions' Fund Move Really Means

The Fund’s Strategic Rebalancing

In November, Massachusetts-based East Coast Asset Management disclosed a portfolio adjustment that caught the attention of market watchers. The fund offloaded 497,847 shares of Perimeter Solutions (NYSE:PRM), reducing its holdings by approximately $6.40 million during Q3, according to SEC filings dated November 14.

Even after this reduction, Perimeter Solutions remains a cornerstone of the fund’s portfolio. As of September 30, the remaining position stood at nearly 1.6 million shares valued at $35.24 million, representing 11.04% of the fund’s 13F reportable assets. Within a 68-position portfolio totaling $319.18 million in U.S. equity holdings, this action accounts for roughly 2.96% of reportable assets.

Portfolio Positioning After the Adjustment

The trimming doesn’t signal a loss of confidence. Rather, Perimeter Solutions has evolved into the fund’s second-largest holding, with only Alphabet (NASDAQ: GOOGL) commanding a larger stake at $50.07 million. Here’s where the fund’s money is concentrated:

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

Why the Stock Surge Matters

The backdrop to this portfolio adjustment is striking. Perimeter Solutions shares have exploded 111% over the past twelve months, vastly surpassing the S&P 500’s more modest 15% gain in the same period. Trading at $28.08 as of Friday, the stock has created meaningful capital appreciation for long-term holders.

The Business Behind the Numbers

Perimeter Solutions operates as a specialty chemicals manufacturer with a dual focus on fire safety and lubricant additives. The company markets its products under established brands including PHOS-CHEK, FIRE-TROL, AUXQUIMIA, SOLBERG, and BIOGEMA. Its revenue streams flow primarily from two segments: Fire Safety products and Oil Additives, serving federal, state, municipal, and commercial clients across the United States, Germany, and international markets.

Current Financial Metrics:

• Current Stock Price: $28.08
• Market Capitalization: $4.15 billion
• Trailing Twelve-Month Revenue: $636.34 million
• Trailing Twelve-Month Net Income: $78.03 million

Recent Operational Performance

The company continues to demonstrate operational momentum. Third-quarter revenue climbed 9% year-over-year to $315.4 million, while adjusted EBITDA grew 9% to $186.3 million. The Fire Safety segment led the charge with segment EBITDA jumping 13%. On a year-to-date basis, adjusted EBITDA is tracking 20% higher than the prior year, and adjusted earnings per share for the quarter reached $0.82, up from $0.75 in the comparable prior-year period.

What the Trim Actually Signals

Perimeter Solutions has grown into an outsized portfolio position following its impressive stock run. The fund’s decision to trim roughly $6 million worth of the holding shouldn’t be misread as a bearish signal. Instead, it represents disciplined portfolio management—the fund is maintaining substantial exposure while reducing concentration risk after significant appreciation.

This type of action reflects a nuanced investment approach: after a security delivers exceptional returns, selective profit-taking helps rebalance the portfolio without abandoning the original investment thesis. For long-term investors, the key takeaway is straightforward—reducing a position after meaningful gains doesn’t mean the original conviction was misplaced. Quite often, it means that conviction was justified, and the fund is simply managing risk prudently while remaining meaningfully invested in the story.