| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.09% | 4.95% | 4.95% |
The Heartland Value Plus Fund gained 4.95% in Q1 2026, matching the Russell 2000 Value Index return of 4.96%. After market breadth began improving late last year, the economy has shown signs of broadening out, with small-caps outperforming large-caps as the Russell 2000 rose 0.89% versus the S&P 500's 4.33% decline. However, the outbreak of war in Iran and rising oil prices have introduced new uncertainties. The fund's managers focus on companies with strong capital allocation signals, noting that nearly 90% of portfolio holdings have active buybacks, 60% are boosting dividends, and over one-third have seen insider buying. Key contributors included Silicon Motion Technology, which benefited from datacenter demand, while Stifel Financial detracted due to AI disruption concerns and rising rates. The managers remain confident in their value investing approach, seeking undervalued companies with strong fundamentals and margin of safety to navigate uncertainty while positioning for continued economic broadening.
The fund seeks to capitalize on improving small-cap market breadth and a broadening economy by applying disciplined value investing principles to identify undervalued companies with strong fundamentals, active capital allocation programs, and margin of safety.
While recent geopolitical developments have introduced new uncertainties to the markets, the managers believe their bottom-up stock selection process should position them to take advantage of the broadening economy and improving market breadth if uncertainty wanes. They focus on their 10 Principles of Value Investing to find underappreciated stocks with margin of safety.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Mar 31 2026 | 2026 Q1 | SF, SIMO, WH | Buybacks, dividends, Hotels, small caps, technology, value |
SIMO WH SF WH WH |
Heartland Value Plus matched its benchmark in Q1 as small-caps outperformed amid broadening market conditions, though geopolitical risks from Iran war cloud the outlook. The fund emphasizes companies with strong capital allocation through buybacks and dividend increases, with 90% of holdings repurchasing shares. Management remains focused on value principles to navigate uncertainty. |
| Jan 12 2026 | 2025 Q4 | BLDR, LAMR, WCC | Advertising, Buybacks, dividends, industrials, real estate, small caps, value |
ITGR CMCO ALEX LAMR WCC BLDR |
Small-cap value fund targeting companies with strong fundamentals and management confidence demonstrated through buybacks and dividend growth. Expects 15% small-cap earnings growth in 2026 as markets broaden and falling rates benefit smaller companies. Key positions include advertising leader Lamar and industrial distributor WESCO, both positioned for strong 2026 performance despite recent underperformance. |
| Oct 9 2025 | 2025 Q3 | BRC, MTRN, PBH, PHIN | Auto Parts, Buybacks, Capital Allocation, dividends, earnings, Rate Cuts, small caps, value |
BRC PHIN MTRN PBH |
Small-cap value fund capitalizing on first earnings growth since 2021 and Fed rate cuts benefiting small companies. Focus on self-help strategies with 84% of holdings buying back stock and 61% growing dividends. Key positions include Brady Corp, Phinia auto parts spin-off, and materials producer Materion. Cautiously optimistic on improving fundamentals while maintaining disciplined value approach. |
| Jul 11 2025 | 2025 Q2 | BRC, MTRN, PBH, PHIN | Auto Parts, Buybacks, Capital Allocation, dividends, materials, Rate Cuts, small caps, value |
GTES SIMO NVST BRC PHIN MTRN PBH |
Small-cap earnings are growing year-over-year for the first time since 2021, creating tailwinds for Heartland's focus on well-managed companies with self-help strategies. The fund targets secular winners allocating capital wisely through buybacks and dividends, with holdings like Brady Corp and Phinia Inc positioned to benefit from improving demand dynamics and Fed rate cuts. |
| Mar 31 2025 | 2025 Q1 | FCFS, GTES, THG | industrials, insurance, Patience, self-help, small caps, value |
THG FCFS GTES |
Heartland Value Plus declined 8.23% in Q1 amid small-cap weakness and trade war fears. The fund focuses on self-help companies strengthening their competitive position independent of macro conditions. Key holdings include Hanover Insurance reducing catastrophic exposure, FirstCash benefiting from consumer stress, and Gates Industrial positioned defensively despite industrial sector concerns. Patient value approach emphasized. |
| Jan 13 2025 | 2024 Q4 | FBK, SMTC | financials, Quality, Regional Banks, self-help, small caps, technology, value |
FBK SMTC |
Heartland Value Plus focuses on small-cap self-help stories trading at attractive valuations rather than post-election momentum plays. Key holdings FB Financial and Semtech exemplify the approach: quality companies with operational improvements, strong balance sheets, and significant discounts to historical averages or peers. The fund positions for potential small-cap outperformance while maintaining discipline on valuation and quality metrics. |
| Sep 30 2024 | 2024 Q3 | GTES, HAYW | Capital Allocation, industrials, rates, self-help, small caps, value |
GTES HAYW |
Heartland Value Plus gained 7.93% in Q3 as small caps outperformed on Fed rate cut optimism. The fund focuses on companies with self-help strategies and strong capital allocation rather than waiting for demand recovery. New positions include Gates Industrial Corporation and increased Hayward Holdings weighting, both industrial companies with margin improvement potential and competitive advantages. |
| Jun 30 2022 | 2024 Q2 | KMT, SAIC | Buybacks, Capital Allocation, consumer discretionary, industrials, small caps, value |
KMT SAIC |
Heartland Value Plus hunts for small-cap green shoots during a challenging quarter, focusing on undervalued companies at trough multiples with strong capital allocation. Holdings like Kennametal and SAIC offer self-help stories with insider buying and active buybacks. The manager expects small-cap earnings recovery in the latter half as markets eventually broaden beyond mega-cap tech dominance. |
| Apr 15 2024 | 2024 Q1 | KMT, MHK | consumer, earnings, industrials, Recession, self-help, small caps, value |
MHK KMT |
Heartland Value Plus Fund sees opportunity in small caps that have endured recession-like conditions and implemented self-help measures. With Russell 2000 earnings expected to outgrow large caps in 2024 and many companies trading at attractive valuations after operational improvements, the fund initiated positions in Mohawk Industries and Kennametal as examples of this thesis. |
| Oct 1 2024 | 2023 Q4 | - | Defensive, Fed policy, risk management, small caps, value | - | Heartland Value Plus underperformed in Q4 as markets favored speculative stocks over the fund's defensive value approach. Despite challenging conditions driven by Fed rate cut expectations, managers maintain discipline around their 10 Principles of Value Investing while making modest adjustments to sector allocations and selectively seeking higher-beta opportunities within their value framework. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
Small CapsThe Russell 2000 Index outperformed the S&P 500 in Q1 as market breadth improved. Small-cap tech stocks performed well after suffering setbacks last year, with valuations remaining reasonable compared to large-cap AI stocks. |
Russell 2000 Market Breadth Outperformance Valuations Tech |
ValueThe fund follows 10 Principles of Value Investing focusing on fundamentals like valuations, balance sheet strength, and earnings dynamics. Low prices, low debt, and high earnings growth potential provide margin of safety during uncertain times. |
Value Investing Fundamentals Margin of Safety Balance Sheet Earnings | |
BuybacksNearly 90% of portfolio companies have active share buyback programs, which the managers view as a sign of management confidence in operational performance and strategic plans. This is one of three key capital allocation indicators they monitor. |
Share Buybacks Capital Allocation Management Confidence Portfolio Holdings | |
Dividends60% of portfolio holdings are currently boosting their dividend payouts, representing another positive capital allocation signal. Dividend increases indicate management confidence and provide income during volatile periods. |
Dividend Increases Capital Allocation Income Management Confidence | |
| 2025 Q4 |
Small CapsSmall-cap earnings continued to gain strength with expected 15% profit growth in 2026, slightly exceeding S&P 500 forecasts. The market is beginning to broaden out as small value stocks outpaced the Magnificent 7. Falling interest rates should disproportionately help small caps as emerging businesses are more sensitive to refinancing costs. |
Small Cap Earnings Broadening Rates Value |
ValueThe Value Plus Strategy focuses on bottom-up fundamentals including attractive valuations, quality balance sheets, and sound business strategies. The manager continues to see opportunities in companies that had been overlooked earlier in the year but appear well-positioned for strong earnings growth in 2026. |
Value Fundamentals Overlooked Earnings | |
BuybacksThe manager likes to see improving fundamentals confirmed by active share buybacks, insider buying, and growing dividends as signs of management confidence. A majority of companies in the portfolio are active in at least two of these three focus areas, including LAMR and BLDR which have been active on buyback programs. |
Buybacks Management Confidence Capital Allocation | |
AIThe artificial intelligence trade suffered a November pullback amid growing concerns about overinvestment in the sector along with a reassessment of who the ultimate winners of this disruptive technology might be. This contributed to market broadening as the Magnificent 7 underperformed. |
AI Overinvestment Pullback | |
| 2025 Q3 |
Small CapsFor the first time since 2021, small-cap earnings have been growing year-over-year, signaling improved demand dynamics. The Russell 2000 Index gained 12.39% in the quarter, outperforming the S&P 500. Small companies are likely beneficiaries of lower financing costs and growing risk appetite from the Fed's rate-cutting cycle. |
Russell 2000 Earnings Growth Rate Cuts Outperformance Demand |
BuybacksThe fund pays close attention to companies allocating capital wisely through share buybacks, viewing them as management's signal that stock is undervalued. Currently, 84% of portfolio companies are in active buyback mode, with examples like Brady Corp and Phinia Inc executing consistent repurchase programs. |
Capital Allocation Share Repurchases Management Signal Undervalued Self-Help | |
DividendsGrowing dividends are viewed as a sign of management confidence in future profits and cash flow. Currently, 61% of portfolio holdings have increased their dividends in the past year, representing a key criterion for stock selection and capital allocation assessment. |
Dividend Growth Cash Flow Management Confidence Income Distribution | |
ValueThe fund follows 10 Principles of Value Investing to identify financially sound, well-run businesses with positive profit dynamics trading at attractive prices relative to earnings, book value and cash flow. Examples include Phinia trading at 6x EV/EBITDA and Materion at 1.7x sales. |
Undervalued Price-to-Earnings Book Value Cash Flow Valuation | |
Auto PartsPhinia Inc represents the auto parts theme as a spun-off company making fuel systems for vehicle manufacturers and aftermarket. The company is the third player in a three-company oligopoly controlling 80-90% market share, with significant aftermarket exposure accounting for 40% of revenues and close to half of operating profits. |
Aftermarket OEM Market Share Oligopoly Fuel Systems | |
| 2025 Q2 |
Small CapsFor the first time since 2021, small-cap earnings have been growing year-over-year, signaling improved demand dynamics. The Russell 2000 Index gained 12.39% in the quarter, outperforming the S&P 500. Small companies are likely beneficiaries of lower financing costs and growing risk appetite from the Fed's rate-cutting cycle. |
Russell 2000 Earnings Growth Rate Cuts Outperformance Demand |
BuybacksThe fund pays close attention to companies allocating capital wisely through share buybacks, viewing them as management's signal that stock is undervalued. Currently, 84% of portfolio companies are in active buyback mode, including Brady Corp and Phinia Inc which are consistently buying back stock. |
Capital Allocation Share Repurchases Management Signal Undervalued Active | |
DividendsGrowing dividends are viewed as a sign of management confidence in future profits and cash flow. 61% of holdings have increased dividends in the past year, with companies like Brady Corp consistently increasing dividends as part of wise capital allocation strategies. |
Dividend Growth Management Confidence Cash Flow Capital Allocation Income | |
ValueThe fund follows 10 Principles of Value Investing to identify financially sound, well-run businesses with positive profit dynamics trading at attractive prices relative to earnings, book value and cash flow. Examples include Phinia trading at 6x EV/EBITDA and Materion at 1.7x sales. |
Undervalued Earnings Multiple Book Value Cash Flow Attractive Prices | |
Auto PartsPhinia Inc represents the auto parts theme as a spun-off company making fuel systems with multiple ways to win. The company is the third player in a three-company oligopoly controlling 80-90% market share, with considerable exposure to the stable after-market business accounting for 40% of revenues. |
Fuel Systems Oligopoly Market Share After-market Spin-off | |
| 2025 Q1 |
ValueThe fund focuses on attractively priced, well-managed companies with high-quality balance sheets, low debt, and positive earnings dynamics through their 10 Principles of Value Investing. They seek companies trading at material discounts to historical multiples despite strong fundamentals. |
Value Investing Discount Balance Sheet Earnings Multiples |
Small CapsThe fund invests in small-cap companies, with performance compared to the Russell 2000 Value Index. Small stocks were particularly hard hit in the quarter, down 9.5% versus 4.3% for the S&P 500, creating opportunities for patient value investors. |
Russell 2000 Small Cap Volatility Opportunity Patience | |
| 2024 Q4 |
Small CapsThe fund focuses on small-cap stocks that have posted two consecutive strong years, with potential for a third positive year based on historical patterns. The manager believes higher-quality small stocks will eventually participate in the market rally as smaller companies benefit from easing monetary policy and fiscal stimulus. |
Russell 2000 Market Breadth Quality Valuation Historical Patterns |
ValueThe strategy adheres to 10 Principles of Value Investing, focusing on attractively priced, well-managed companies with high-quality balance sheets. The fund seeks companies trading at discounts to peers and historical averages, such as FB Financial at 1.8X tangible book value and Semtech at 20-25% discount to peers. |
Valuation Multiples Book Value Discount Principles Attractive Pricing | |
Regional BanksThe fund concentrates on banks with relatively cheap valuations operating in geographical areas showing strong signs of growth. FB Financial exemplifies this approach, operating in Tennessee, Kentucky, North Georgia, and Alabama with strong deposit and loan growth across its portfolio. |
Southeast Growth Markets Deposit Growth Loan Growth Geographic Focus | |
| 2024 Q3 |
ValueThe fund focuses on companies with compelling self-help strategies and strong capital allocation policies that are being rewarded in the current market. The manager emphasizes companies actively taking steps to improve their financial strength, competitive advantage, and operational efficiency rather than simply waiting for sales to improve. |
Self-help Capital allocation Operational efficiency Undervalued Margin improvement |
Small CapsThe Russell 2000 Index of small stocks gained 9.27% in the third quarter versus 5.89% for the S&P 500, as the market began to broaden out in anticipation of Federal Reserve interest rate cuts. An easing cycle should benefit stocks positioned for an uptick in earnings once demand dynamics improve. |
Russell 2000 Market broadening Rate cuts Earnings uptick | |
RatesThe Federal Reserve began cutting short-term interest rates for the first time since the global pandemic, with optimism around an easing cycle helping lift small stocks. Rate cuts could eventually lead to a modest demand push, especially for companies tied to housing, as lower borrowing costs may spark an uptick in demand. |
Fed cuts Easing cycle Lower borrowing costs Demand improvement | |
| 2024 Q2 |
Small CapsThe fund focuses on small-cap value investing during a challenging quarter where the Russell 2000 fell 3.28%. The manager is hunting for green shoots and expects small-cap earnings to improve in the latter half of the year, especially once Magnificent 7 tech stocks are removed from comparisons. |
Russell 2000 Value Earnings Recovery |
BuybacksMore than 85% of holdings are engaged in active buybacks, which is the highest percentage in recent memory. The fund views buybacks as a signal that shares are undervalued and favors companies with strong capital allocation policies including active stock buybacks. |
Capital Allocation Undervalued Shareholder Returns | |
ValueThe strategy focuses on undervalued companies trading at trough multiples while at trough earnings. The fund seeks disciplined bargain hunting opportunities with companies that have low trading multiples, strong free cash flow, and solid balance sheets. |
Trough Multiples Free Cash Flow Balance Sheets | |
| 2024 Q1 |
Small CapsSmall caps underperformed large caps in Q1 but are expected to see faster earnings growth in 2024 (11.3% vs 10.6% for large caps). Many small companies have already experienced recession-like conditions and implemented self-help strategies, creating opportunities with wide valuation disparities versus mega caps. |
Russell 2000 Earnings Growth Valuation Self-help Recession |
ValueThe fund follows Heartland's 10 Principles of Value Investing, focusing on companies with low leverage, strong free cash flow, and successful capital allocation. They seek companies trading at attractive valuations that have implemented operational improvements and cost-cutting measures. |
Low Leverage Free Cash Flow Capital Allocation Operational Improvements Cost Cutting | |
| 2023 Q4 |
ValueThe fund adheres to Heartland's 10 Principles of Value Investing, focusing on well-managed, financially strong businesses with sound balance sheets trading at attractive prices. The managers emphasize patience, discipline, and risk-aversion as essential characteristics of value investing, refusing to abandon these principles despite challenging market conditions. |
Value Discipline Principles |
Small CapsThe fund invests in small-cap stocks, with performance compared to the Russell 2000 Index. The managers note that small-cap stocks surged 22.4% in the final nine weeks of the quarter, led by speculative, highly leveraged companies that stand to benefit in early cycle stages. |
Small Caps Russell 2000 Early Cycle | |
Risk AppetiteThe quarter saw a dramatic shift in risk appetite as investors embraced speculative, high-beta, and highly leveraged stocks. The managers describe this as a challenging environment for defensive-minded investors, with the market rewarding risk-taking behavior based on expectations of aggressive Fed rate cuts. |
Risk Appetite Speculation Leverage |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Mar 31, 2026 | Fund Letters | Heartland Value Plus Fund | WH | Wyndham Hotels & Resorts | Lodging | Hotels, Restaurants & Leisure | Bull | New York Stock Exchange | capital allocation, Consumer Discretionary, dividend, economic recovery, Franchising, Hotels, Share Buybacks, Value | Login |
| Mar 31, 2026 | Fund Letters | Heartland Value Plus Fund | SF | Stifel Financial Corp | Capital Markets | Capital Markets | Bull | New York Stock Exchange | Advisor Satisfaction, AI efficiency, Capital markets, EPS growth, financial services, organic growth, Value, wealth management | Login |
| Mar 31, 2026 | Fund Letters | Heartland Value Plus Fund | WH | Wyndham Hotels & Resorts | Lodging | Hotels, Restaurants & Leisure | Bull | New York Stock Exchange | capital allocation, Consumer Discretionary, dividend, economic recovery, Franchising, Hotels, Share Buybacks, Value | Login |
| Mar 31, 2026 | Fund Letters | Heartland Value Plus Fund | WH | Wyndham Hotels & Resorts | Lodging | Hotels, Restaurants & Leisure | Bull | New York Stock Exchange | capital allocation, Consumer Discretionary, dividend, economic recovery, Franchising, Hotels, Share Buybacks, Value | Login |
| Mar 31, 2026 | Fund Letters | Heartland Value Plus Fund | SIMO | Silicon Motion Technology Corporation | Semiconductors | Semiconductors & Semiconductor Equipment | Bull | NASDAQ | Arbitration Settlement, data centers, hyperscalers, margin expansion, Memory Components, semiconductors, turnaround, Value | Login |
| Jan 12, 2026 | Fund Letters | Bradford Evans | LAMR | Lamar Advertising Company | Real Estate | Specialized REITs | Bull | New York Stock Exchange | advertising, buybacks, dividends, Elections, REITs | Login |
| Jan 12, 2026 | Fund Letters | Will Nasgovitz | ITGR | Integer Holdings Corporation | Health Care | Health Care Equipment | Bull | New York Stock Exchange | buybacks, Execution, Margins, Medicaldevices, recovery | Login |
| Jan 12, 2026 | Fund Letters | Will Nasgovitz | CMCO | Columbus McKinnon Corporation | Industrials | Industrial Machinery | Bull | NASDAQ | acquisition, Insiders, Integration, leverage, Margins | Login |
| Jan 12, 2026 | Fund Letters | Bradford Evans | WCC | WESCO International, Inc. | Industrials | Trading Companies & Distributors | Bull | New York Stock Exchange | Automation, Distribution, Margins, recovery, valuation | Login |
| Jan 12, 2026 | Fund Letters | Bradford Evans | BLDR | Builders FirstSource, Inc. | Industrials | Building Products Distribution | Bull | New York Stock Exchange | buybacks, Cyclicality, Housing, Insiders, recovery | Login |
| Jan 12, 2026 | Fund Letters | Will Nasgovitz | ALEX | Alexander & Baldwin, Inc. | Real Estate | Diversified REITs | Bull | New York Stock Exchange | Balance_Sheet, Patience, realestate, Takeprivate, valuation | Login |
| Oct 9, 2025 | Fund Letters | Bradford Evans | PHIN | Phinia Inc. | Consumer Discretionary | Auto Parts & Equipment | Bull | NYSE | aftermarket, Auto parts, buybacks, cost savings, deleveraging, oligopoly, rerating | Login |
| Oct 9, 2025 | Fund Letters | Bradford Evans | MTRN | Materion Corporation | Materials | Specialty Chemicals | Bull | NYSE | Capacity, divestiture, EBITDA, guidance, Margins, recovery, semiconductors | Login |
| Oct 9, 2025 | Fund Letters | Bradford Evans | PBH | Prestige Consumer Healthcare Inc. | Health Care | Pharmaceuticals | Bull | NYSE | Earnings-recovery, Integration, Inventory, Margins, OTC, supply chain, valuation | Login |
| Oct 9, 2025 | Fund Letters | Bradford Evans | BRC | Brady Corporation | Industrials | Electronic Equipment, Instruments & Components | Bull | NYSE | buybacks, Consumables, data centers, dividends, Identification, margin expansion, Tuck-ins | Login |
| Sep 30, 2025 | Fund Letters | Heartland Value Plus Fund | PHIN | Phinia Inc. | Consumer Discretionary | Auto Parts & Equipment | Bull | NYSE | Aerospace, aftermarket, Auto parts, deleveraging, Fuel Systems, hybrid vehicles, insider buying, market share gains, Oem, Off-highway, oligopoly, Share Buybacks, spin-off | Login |
| Sep 30, 2025 | Fund Letters | Heartland Value Plus Fund | BRC | Brady Corp. | Industrials | Industrial Machinery | Bull | NYSE | Aerospace, data center, Dividend Growth, ID Solutions, Industrial Printers, Labels, restructuring, Share Buybacks, Tuck-in Acquisitions, Wire Marking, Workplace Safety | Login |
| Sep 30, 2025 | Fund Letters | Heartland Value Plus Fund | PBH | Prestige Consumer Healthcare | Consumer Staples | Personal Products | Bull | NYSE | acquisition, Clear Eyes, Consumer brands, Dramamine, Eye Care, Inventory Restocking, multiple expansion, OTC Healthcare, supply chain, vertical integration | Login |
| Sep 30, 2025 | Fund Letters | Heartland Value Plus Fund | MTRN | Materion Corp. | Materials | Specialty Chemicals | Bull | NYSE | advanced materials, Beryllium, high-margin, portfolio optimization, Record Margins, semiconductors, Specialty-Metals, Technology Applications, vertically integrated | Login |
| Jul 11, 2025 | Fund Letters | Bradford Evans | GTES | Gates Industrial Corporation plc | Industrials | Industrial Machinery | Bull | New York Stock Exchange | aftermarket, Industrial, Margins, Pricing, tariffs | Login |
| Jul 11, 2025 | Fund Letters | Bradford Evans | SIMO | Silicon Motion Technology Corp. | Information Technology | Semiconductors | Bull | NASDAQ | hyperscalers, Margins, Revaluation, semiconductors, Storage | Login |
| Jul 11, 2025 | Fund Letters | Bradford Evans | NVST | Envista Holdings Corporation | Health Care | Health Care Equipment | Bull | New York Stock Exchange | buybacks, Dental, Margins, tariffs, valuation | Login |
| Mar 31, 2025 | Fund Letters | Heartland Value Plus Fund | THG | The Hanover Insurance Group, Inc. | Financials | Property & Casualty Insurance | Bull | NYSE | Catastrophic Losses, combined ratio, Dividend Growth, investment portfolio, Property & Casualty Insurance, risk management, turnaround, Value | Login |
| Mar 31, 2025 | Fund Letters | Heartland Value Plus Fund | FCFS | FirstCash Holdings Inc. | Financials | Consumer Finance | Bull | NASDAQ | Collateral, consumer finance, Counter-cyclical, Credit risk, defensive, Dividend Growth, Pawn Shops, Share Buybacks, Value | Login |
| Mar 31, 2025 | Fund Letters | Heartland Value Plus Fund | GTES | Gates Industrial Corporation plc | Industrials | Industrial Machinery | Bull | NYSE | All-weather, Auto Replacement Parts, balance sheet, Cyclical, industrial machinery, Margin Improvement, Self Help, Share Buybacks, Value | Login |
| Dec 31, 2024 | Fund Letters | Heartland Value Plus Fund | FBK | FB Financial Corporation | Financials | Regional Banks | Bull | NYSE | deposit growth, Dividend Growth, insider buying, loan growth, net interest income, regional banks, Southeast, tangible book value, Value | Login |
| Dec 31, 2024 | Fund Letters | Heartland Value Plus Fund | SMTC | Semtech Corporation | Information Technology | Semiconductors & Semiconductor Equipment | Bull | NASDAQ | AI, Asset Divestiture, data centers, deleveraging, EBITDA Discount, IoT, Management Change, semiconductors, Signal integrity, turnaround | Login |
| Sep 30, 2024 | Fund Letters | Heartland Value Plus Fund | GTES | Gates Industrial Corporation | Industrials | Industrial Machinery | Bull | NYSE | Aftermarket Parts, Defensive Revenue, industrial machinery, manufacturing, margin expansion, market leadership, turnaround, Value | Login |
| Sep 30, 2024 | Fund Letters | Heartland Value Plus Fund | HAYW | Hayward Holdings | Industrials | Building Products | Bull | NYSE | aftermarket, Building Products, Cyclical Recovery, Housing, margin expansion, oligopoly, Operational Leverage, pool equipment | Login |
| Jun 30, 2024 | Fund Letters | Heartland Value Plus Fund | KMT | Kennametal, Inc. | Industrials | Industrial Machinery | Bull | NYSE | Cost Reduction, Cyclical Recovery, Industrial Cutting Tools, insider buying, operating leverage, restructuring, Share Buybacks, turnaround | Login |
| Jun 30, 2024 | Fund Letters | Heartland Value Plus Fund | SAIC | Science Applications International Corp. | Information Technology | IT Services | Bull | NYSE | Contract Recompete, Dividend Growth, free cash flow yield, government contracting, Government IT Services, insider buying, Management Change, turnaround | Login |
| Mar 31, 2024 | Fund Letters | Heartland Value Plus Fund | MHK | Mohawk Industries | Consumer Discretionary | Home Improvement Retail | Bull | NYSE | Automation, Cyclical, Flooring, manufacturing, operating leverage, Self Help, Trough Valuation, turnaround, Value | Login |
| Mar 31, 2024 | Fund Letters | Heartland Value Plus Fund | KMT | Kennametal | Industrials | Industrial Machinery | Bull | NYSE | Aerospace, Cost Reduction, Cutting tools, Defense, energy, Industrial, infrastructure, operating leverage, Trough Valuation, turnaround | Login |
| TICKER | COMMENTARY |
|---|---|
| SIMO | A year ago, shares of the leading maker of memory components used in PCs, smartphones, data centers, and industrial and auto applications sold off amid a variety of concerns. They included tariffs, consumer spending worries, and questions over whether investors might be overestimating the capex needs of large-scale cloud service providers known as hyperscalers. At the time, we remained committed to the stock because we believed the company was in the early days of a re-rating process, as SIMO had been making a push away from trailing-edge, lower-margin consumer electronics into higher-margin, leading-edge applications driven by hyperscaler demands. In the first quarter, the stock was a contributor to our outperformance, as consumer spending has held up and hyperscalers continue to indicate robust datacenter capex growth. In their fourth-quarter conference call, management reiterated the firm's outlook for their PC and smartphone end markets and the growth prospects for their data center storage components, which are expected to drive margins substantially higher. Yet in our opinion, SIMO remains meaningfully undervalued versus our current price target. The stock currently trades at $117, but we believe the company should be valued at $185. That's based on a multiple of 15X EBITDA plus an anticipated $160 million cash settlement from SIMO's ongoing arbitration with MaxLinear surrounding the termination of a proposed merger agreement more than two years ago. |
| WH | In this K-shaped recovery, shares of Wyndham Hotels (WH) have been punished as revenues for hotels that operate in the midscale and economy space have lagged behind upscale peers such as Marriott or Hilton. This isn't so surprising, as inflation has eaten into the consumer budgets while the weak manufacturing economy also impacted Wyndham's grey and blue collar business travel base. Yet a broadening economy and improving PMI should benefit Wyndham's base of business travelers and middle income customers. The global franchisor of hotels such as Wyndham, Days Inn, Laquinta, Ramada, and Super 8 should also see an incremental boost in demand in some of its key markets thanks to key events this year, including the World Cup in North America, the 250th birthday celebration for the U.S., and the 100th anniversary of Route 66. Wyndham shares are valued at just 11-12x EBITDA, which compares favorably to Marriott and Hilton, which trade at 17-20x EBITDA. Even better, management has been actively buying back the company's shares while consistently boosting its dividend payout, hitting two of our three capital allocation priorities. |
| SF | One of the biggest detractors to our strategy's performance in the quarter was Stifel Financial Corp. (SF), which provides brokerage, investment banking, investment advisory, and related financial services. Shares of the global wealth manager began selling off in early February as the market expressed concerns around AI's ability to disrupt their business. Then, the spike in interest rates, driven by concerns about higher inflation and oil prices, further weighed on the stock as the market sold off in March, impacting total client assets and investment banking prospects during a period of potentially 'higher for longer' rates. We believe Stifel should still be able to grow revenues and expand margins for the foreseeable future as the company continues to execute on organic asset growth. The company ranked no. 1 in JD Power's Advisor Satisfaction study for the third consecutive year. As a result, Stifel continues to attract new financial advisors to its platform. Meanwhile, AI should be a tailwind for operational efficiency as it allows Stifel to automate routine tasks like compliance checks, client onboarding, and producing reports. This should help boost advisor productivity and better client retention. Yet with price/earnings ratio of 11 times 2026 consensus EPS estimates, we believe Stifel is trading at an attractive valuation, especially for a business enjoying durable low-double-digit EPS growth. |
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