What happened
According to an SEC filing dated Feb. 17, 2026, Palo Duro Investment Partners, LP initiated a new position in Darling Ingredients (DAR +2.39%) acquiring 632,050 shares during the fourth quarter. The estimated transaction value, based on the average closing price over the quarter, was approximately $22.75 million. The stake’s quarter-end value also stood at $22.75 million, reflecting both the size of the purchase and prevailing stock prices at the period’s close.
What else to know
This new holding represents 6.8% of the fund’s 13F reportable assets under management as of Dec. 31, 2025.
- Top holdings after the filing:
- Antero Resources: $66.63 million (20.0% of AUM)
- Gulfport Energy: $46.30 million (13.9% of AUM)
- Chord Energy: $42.64 million (12.8% of AUM)
- Baker Hughes: $41.51 million (12.4% of AUM)
- Permian Resources: $38.13 million (11.4% of AUM)
As of Feb. 25, 2026, shares of Darling Ingredients were priced at $53.08, up 34.8% over the past year, outperforming the S&P 500 by 19 percentage points.
Company overview
| Metric | Value |
|---|---|
| Price (as of market close 2/25/26) | $53.08 |
| Market capitalization | $8.40 billion |
| Revenue (TTM) | $6.14 billion |
| Net income (TTM) | $62.80 million |
Company snapshot
Darling Ingredients:
- Produces ingredients and specialty solutions from animal by-products, used cooking oil, and residual bakery products, including collagen, edible and feed-grade fats, animal proteins, organic fertilizers, and bioenergy feedstocks.
- Operates a vertically integrated model that collects, processes, and converts waste streams into value-added products for food, feed, fuel, and industrial applications.
- Serves customers in the pharmaceutical, food, pet food, animal feed, industrial, fuel, and fertilizer sectors across North America, Europe, China, South America, and Australia.
The company leverages a broad international footprint and integrated operations to drive value from waste streams and by-products.
What this transaction means for investors
Palo Duro Investment Partners appears to have pulled off quite the feat by scooping up over 600,000 shares of Darling Ingredients in Q4. Less than two months into 2026, the stock is up nearly 50%, and recently reported Q4 earnings that saw sales rise 21% and adjusted EBITDA increase 16%. Following Darling’s rise in Q1 this year, I’ll be interested to see what Palo Duro does in the upcoming quarter, whether it adds to, holds, or sells this winning position.
From a stock-level, Foolish perspective, there is a lot to like about Darling Ingredients. It is a literal trash-to-treasure type of investment, processing animal by-products, used cooking oil, and residual baking products into usable ingredients for a number of industries. Refining these by-products, Darling creates feed, food, and fuel derivatives, such as protein for animal feed, collagen and gelatin for certain foods, and green diesel.
While the newer fuel business is a bit cyclical, the entirety of Darling’s operations are rock solid. Over the last decade, sales and free cash flow grew by 5% and 15% annually. Far from flashy, but trading at 12 times FCF -- even after rising nearly 50% this year — Darling is a reasonably valued cornerstone stock for investors seeking a bit of stability with market-beating potential. Darling just grew sales by an outsize 21% in its most recent quarter, so I’ll be curious to see what Palo Duro does in the upcoming quarter, following the firm’s well-timed purchase of the stock.
