| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 8.85% | 9.9% | 14.39% |
Heartland Mid Cap Value Fund gained 9.90% in Q2 2026, trailing the Russell Midcap Value Index's 13.40% return due to extreme concentration in perceived AI beneficiaries. The two largest index holdings rocketed nearly 5,000% and 1,000% over 12 months, with momentum outperforming free cash flow yield by over 1000 basis points until a sudden late-June rotation. Despite being overweight five of the top 25 contributors at twice benchmark concentration, the Fund underperformed, underscoring how narrow index returns were. The team reduced ON Semiconductor after it doubled to reach price target, built MarketAxess Holdings despite near-term headwinds given compelling 8.8X EV/EBITDA valuation, and added International Flavors and Fragrances as a self-help turnaround at 12.23X versus industry leader at 19.14X. The managers acknowledge AI's profound impact but warn infrastructure suppliers may face boom-bust cycles like historical technology revolutions. They maintain discipline using four-scenario price targets and their 10 Principles, believing valuation disparities remain as wide as they can recall, creating exploitable opportunities among mispriced stocks on both sides of the AI narrative.
Heartland maintains disciplined value investing in mid-cap stocks using a structured two-bucket approach that balances high-quality companies trading at significant discounts with deeply discounted businesses requiring self-help catalysts, guided by scenario-based price targets and their 10 Principles of Value Investing to exploit wide valuation disparities in a market dominated by AI speculation.
The team expects valuation disparities to remain as wide as they can recall in a broadly expensive market, creating exploitable dislocations. They believe AI's implications are real but many stocks are mispriced on both sides of the narrative, offering opportunities among perceived losers, overlooked potential winners, and ignored businesses in between. The managers emphasize that successful investing is about managing risk rather than avoiding it, and they intend to use their four-scenario price target framework and 10 Principles of Value Investing to maintain discipline through market noise. The tone is cautiously optimistic about finding opportunities despite challenging market conditions dominated by speculation.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 15 2026 | 2026 Q2 | BK, CNC, CSX, DAL, FLEX, GLW, HOOD, HPE, HUM, IFF, MKTX, ON, TER, URI, WDC | AI, deep value, mid cap, self-help, semiconductors, technology, valuation, value |
ON MKTX IFF |
Heartland's mid-cap value fund gained 9.90% but trailed the index's 13.40% return as AI euphoria drove extreme concentration, with top holdings up 1,000-5,000%. The team reduced ON Semiconductor after doubling, added MarketAxess at 8.8X EV/EBITDA despite headwinds, and initiated IFF as a self-help turnaround. They see wide valuation disparities creating opportunities amid speculation, maintaining discipline through scenario-based targets. |
| Mar 31 2025 | 2026 Q1 | MIDD, PRGO, TDY | healthcare, Industrial Policy, mid cap, technology, value, volatility |
TDY MIDD PRGO |
Heartland Mid Cap Value outperformed in Q1 as market volatility created attractive entry points for patient value investors. Federal policy uncertainties drove broad market weakness, but the fund's two-bucket approach captured opportunities in quality names like Teledyne, Middleby, and Perrigo. Stock selection improved as risk aversion returned, positioning the fund well for long-term outperformance. |
| Jan 12 2026 | 2025 Q4 | JBHT, KMB, MKTX | AI, Capital markets, financials, industrials, Logistics, mid cap, Quality, value |
JBHT MKTX KMB |
Heartland Mid Cap Value underperformed in Q4 as quality value stocks lagged speculative segments, with valuation disparities reaching extreme levels. The fund maintains disciplined two-bucket approach, benefiting from J.B. Hunt's operational improvements and MarketAxess's market share recovery. Significant insider buying across portfolio companies contrasts with selling in overvalued names, creating long-term opportunities for patient value investors. |
| Oct 9 2025 | 2025 Q3 | CNC, DHI, LRCX | AI, healthcare, Homebuilders, mid cap, Recession, semiconductors, Unemployment, value |
DHI LRCX |
Heartland's value discipline hurt Q3 performance as markets chased AI momentum regardless of valuations. Economic weakness in housing and labor markets persists, with unemployment claims rising. Key holdings include homebuilder D.R. Horton, semiconductor equipment leader Lam Research, and healthcare insurer Centene facing policy headwinds. Management maintains conviction that valuation disparities will eventually reward their disciplined approach. |
| Jul 11 2025 | 2025 Q2 | CNC, DHI, LRCX | AI, cyclicals, fundamentals, Homebuilders, mid cap, Quality, semiconductors, value |
EG HUBB DHI LRCX CNC |
Heartland Mid Cap Value underperformed in Q3 as AI euphoria favored growth over value. Strong performance from homebuilder D.R. Horton and semiconductor equipment maker Lam Research was offset by managed care provider Centene's policy-driven challenges. Economic weakness in housing and jobs suggests potential refocus on fundamentals. Managers maintain disciplined value approach despite near-term headwinds. |
| Mar 31 2025 | 2025 Q1 | MIDD, PRGO, TDY | healthcare, industrials, mid cap, technology, value, volatility |
TDY MIDD PRGO |
Heartland Mid Cap Value outperformed in Q1 2025 as market volatility created attractive value opportunities. Their two-bucket approach targets quality companies like Teledyne Technologies and deep value plays like Middleby Corporation. Despite federal policy uncertainties pricing many stocks for recession, the managers view current pessimism as contrarian opportunity for patient value investors. |
| Jan 13 2025 | 2024 Q4 | CNC, SYY, WTW | Consumer Staples, Deregulation, financials, healthcare, mid cap, Speculation, value |
SYY WTW CNC |
Heartland's disciplined value approach underperformed in Q4 as post-election speculation favored growth over value. The fund refuses to chase elevated valuations, maintaining focus on attractively priced businesses like Sysco, Willis Tower Watson, and Centene. With investor confidence at 25-year highs and Treasury yields rising, current market dynamics appear unsustainable, positioning the fund for relative outperformance when conditions normalize. |
| Sep 30 2024 | 2024 Q3 | DG, RHI, SNN | Cyclical, Fed policy, healthcare, mid cap, Staffing, value |
RHI SNN DG |
Heartland Mid Cap Value Fund implements a disciplined two-bucket value strategy, adding cyclical opportunities like Robert Half during staffing industry weakness and Smith and Nephew's orthopedics turnaround. Despite Federal Reserve rate cuts, employment concerns persist with potential unemployment rising to 6%. The fund emphasizes opportunistic investing through volatility using established price target frameworks rather than economic forecasting. |
| Jun 30 2022 | 2024 Q2 | FIS, JBHT, SRCL | deep value, financials, industrials, Manufacturing, mid cap, self-help, value |
FIS SRCL JBHT |
Heartland's mid-cap value strategy underperformed in Q2 but maintains discipline by avoiding speculative AI investments while focusing on self-help stories. New position in FIS represents classic turnaround opportunity, Stericycle validated thesis with acquisition, and J.B. Hunt offers structural growth despite cyclical headwinds. Multiple holdings approaching inflection points. |
| Apr 15 2024 | 2024 Q1 | COIN, DCI, FAF, HOOD, HSY, JBHT, PRGO, SOFI, SQ | Consumer Staples, financials, healthcare, industrials, mid cap, Quality, value |
DCI HSY PRGO |
Heartland's mid-cap value strategy underperformed in Q1 despite adding quality positions like Donaldson and Hershey at attractive valuations. The managers remain cautious on macro risks including consumer debt stress and commercial real estate maturity walls, while avoiding speculative AI plays. Their two-bucket approach balances quality and deep value to navigate uncertain economic conditions. |
| Oct 1 2024 | 2023 Q4 | CABO, CNC, NTRS | Communications, credit, financials, healthcare, mid cap, Quality, rates, value |
NTRS CNC CABO |
Heartland's mid-cap value strategy lagged in Q4 as speculative stocks surged but outperformed annually through disciplined stock selection. The fund targets quality-value companies like Northern Trust and deeply discounted names like Cable One. Managers remain cautious on emerging credit risks while maintaining focus on fundamentals over soft-landing consensus in a market driven by risk appetite. |
| Sep 30 2023 | 2023 Q3 | FAF, NOV, SPB | Bottom-up, Consumer Staples, Cyclical, energy, financials, mid cap, value |
FAF APA|C|FFIV|KHC|NOV|UNH SPB |
Heartland Mid Cap Value outperformed in Q3 through disciplined bottom-up value investing, adding positions like Spectrum Brands while maintaining conviction in energy leader NOV and cyclical recovery play First American Financial. Despite macro uncertainties around consumer stress and banking sector challenges, the fund focuses on fundamental security selection over market timing. |
| Oct 17 2022 | 2022 Q3 | AAP, CEG, SWKS, TCBI | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIAI infrastructure spending boom is driving euphoric market conditions, with perceived AI winners experiencing extreme price appreciation. The team acknowledges AI's profound long-term impact but warns that infrastructure suppliers may experience boom-bust cycles as capital chases growth until excess supply erodes profitability. They compare the current AI boom to historical technology revolutions like railroads, where thematic correctness did not guarantee attractive shareholder returns for decades. |
Data Centers Semiconductors Infrastructure Technology Speculation |
SemiconductorsThe portfolio holds multiple semiconductor positions benefiting from AI infrastructure buildout, including power management and memory manufacturers. ON Semiconductor doubled in price by early June, reaching the team's price target, driven by silicon carbide adoption in EVs, market share gains with global EV manufacturers, and emerging datacenter power management opportunities. The team reduced weighting after the sharp appreciation but maintains a position given multiple simultaneous drivers. |
Silicon Carbide Power Management Memory Electric Vehicles Data Centers | |
Electric VehiclesON Semiconductor's silicon carbide semiconductors are used primarily in electric vehicles to reduce energy loss and improve efficiency. The company has gained market share with leading global EV manufacturers and enjoys outsized representation in newer car models. However, the company endured a cyclical deceleration in auto markets that began in 2023, though management has implemented self-help measures during the downturn. |
Silicon Carbide Semiconductors Auto Power Management | |
Capital MarketsMarketAxess Holdings, the largest U.S. corporate bond e-trading platform, was the Fund's biggest detractor despite being a high-quality, attractively valued business. Current macro conditions are a headwind as heavy primary bond issuance (much of it financing the AI boom) and tighter credit spreads have temporarily diverted trading volume away from the secondary market. The team remains confident based on margin expansion potential, market share gains, scale advantages in international markets, and compelling valuation at 8.8X EV/EBITDA versus peer median of 14.0X. |
Bond Trading E-trading Financial Technology Credit | |
Specialty ChemicalsInternational Flavors and Fragrances is a new deep-value holding that produces specialty ingredients for food, beverage, personal care, and household products. Management has spent over two years streamlining the portfolio to focus on higher-margin businesses with leading market share and better pricing power, following years of wayward capital allocation by prior management. The company trades at 12.23X forward EBITDA versus industry leader Givaudan at 19.14X, and recently instituted its first share buyback program in six years. |
Flavors Fragrances Consumer Turnaround Self-help | |
ValueThe team maintains disciplined value investing using their 10 Principles of Value Investing and scenario-based price targets across four outcomes (base case, upside, downside, and maximum downside). They emphasize that in a broadly expensive market, valuation disparities remain as wide as they can recall. The strategy uses a structured two-bucket approach balancing Quality Value (high-quality companies at significant discounts) with Deep Value (deeply discounted businesses with self-help catalysts), refusing to rely solely on macro tailwinds even at extremely low valuations. |
Valuation Discipline Price Targets Quality Deep Value | |
| 2026 Q1 |
ValueFund employs two-bucket approach seeking quality value companies trading at bargains and deeply discounted deep value businesses. Market volatility is creating compelling valuations for high-quality companies with strong long-term prospects as many companies are now priced for material economic slowdown. |
Quality Deep Value Bargains Valuations Discounted |
VolatilityRecent equity market weakness and heightened volatility is selectively presenting more attractive entry points for patient investors. Market mood took 180-degree turn amid rising policy uncertainties, with Russell Midcap down 3.4% and S&P 500 down 4.3% in first quarter. |
Market Weakness Entry Points Policy Uncertainty Russell Midcap | |
Industrial PolicyRising uncertainties surrounding federal policy including fears over tariffs, spending cuts, and cancellation of government contracts have softened business and consumer confidence. These policy concerns are driving market volatility and economic slowdown expectations. |
Federal Policy Tariffs Spending Cuts Government Contracts | |
| 2025 Q4 |
ValueHigh-quality value stocks continued to lag more speculative parts of the market, with the valuation gap between the two as extreme as we've ever seen. The fund employs a two-bucket approach holding both Quality Value and Deep Value companies. Quality Value holdings lagged significantly in the quarter despite historically outperforming more speculative fare. |
Quality Deep Value Valuation Disparity |
AISpeculative investors have confidently rewarded perceived AI winners with lofty valuations, seeming to assign a degree of permanence to top line benefits that have a questionable duration. The euphoria has impacted valuations in many Quality Value and Deep Value companies. The fund makes observations with skepticism about whether fundamentals prove strong enough for long enough to justify these valuations. |
Valuations Speculation Duration | |
LogisticsJ.B. Hunt Transport Services was the top contributor in Industrials and for the portfolio in the quarter. The diversified transportation company focusing on intermodal shipping has a mode agnostic approach and scale advantages. Despite freight market volatility, Hunt beat analysts' forecasts owing to recent cost reduction actions and strong cash flow generation. |
Transportation Intermodal Freight | |
Capital MarketsThe fund initiated a new position in MarketAxess Holdings, which owns and operates the largest e-trading platform in the U.S. for corporate bonds. Operating a trading platform is all about scale, where volume determines profitability. The company has been gaining share in key areas of the U.S. credit market with share recovery happening faster than expected. |
Trading Platform Electronic Bonds | |
| 2025 Q3 |
AIGrowing optimism surrounding the AI boom and corresponding surge in electricity demand have helped power large- and mid-cap growth stocks to new highs regardless of business model quality or valuation. The manager believes AI is disruptive technology but many current perceived winners could fail to live up to the hype, similar to other disruptive technologies like the internal combustion engine and internet. |
Artificial Intelligence Technology Disruption Electricity Growth |
HomebuildersD.R. Horton represents the Deep Value bucket as the largest homebuilder with 10% market share and scale advantages in a fragmented industry. The company has strong positioning in entry-level homes using speculative inventory to operate like a manufacturer, reducing unit costs. Management pivoted away from owning large undeveloped land parcels to less capital-intensive methods. |
Housing Construction Manufacturing Scale Capital | |
Semiconductor CycleLam Research is a Quality Value holding with leading market position in semiconductor capital equipment integral to advanced integrated circuits production. The SemiCap industry has consolidated with 5 companies controlling 75% of the market. Lam's leadership with Memory customers became mission-critical for leading-edge chip manufacturers, positioning the company for market share gains. |
Semiconductors Equipment Memory Consolidation Technology | |
Managed CareCentene suffered from policy-induced risk pool shift in ACA Healthcare Exchanges that negatively impacted profit margins and caused pre-announced earnings cut. Management articulated aggressive pricing actions to reflect recent developments and restore margins. Political pressure from both sides intensifies to address health insurance affordability crisis. |
Healthcare Insurance Policy Margins Pricing | |
ValueThe manager emphasizes their value approach guided by 10 Principles of Value Investing focusing on attractively priced, financially sound businesses. They observe valuation disparities across companies as wide as ever recalled in a generally expensive broad market. The strategy uses a four-price target approach respecting range of outcomes and valuation discipline. |
Valuation Discipline Quality Fundamentals Pricing | |
| 2025 Q2 |
AIThe market's ongoing fixation with AI and growing optimism surrounding the AI boom have helped power large- and mid-cap growth stocks to new highs regardless of business model quality or valuation. The managers believe AI is a disruptive technology, but many current perceived winners could fail to live up to the hype, similar to other disruptive technologies like the internal combustion engine and the internet. |
Artificial Intelligence Technology Disruption Valuations Growth |
ValueThe fund follows a value investing approach guided by their 10 Principles of Value Investing, focusing on attractively priced, financially sound businesses. They observe valuation disparities across companies that are as wide as they can ever recall in a generally expensive broad market, which they believe can be exploited with the right process and time horizon. |
Value Investing Valuations Fundamentals Discipline Process | |
HomebuildersD.R. Horton, the largest homebuilder in the country with around 10% market share, was their best-performing holding. The company has a strong position in entry-level homes and operates with speculative inventory to reduce unit costs. Management has pivoted away from owning large swaths of undeveloped land, preferring less capital-intensive methods to source buildable lots. |
Housing Construction Real Estate Affordability Manufacturing | |
Semiconductor CycleLam Research, a supplier of semiconductor capital equipment with leading market position in technology integral to production of advanced integrated circuits, was a standout Quality Value holding. The SemiCap industry has consolidated with 5 companies controlling almost 75% of the market, and Lam's leadership position with Memory customers proved fortuitous for gaining share in the industry. |
Semiconductors Capital Equipment Memory Consolidation Technology | |
| 2025 Q1 |
ValueThe fund employs a two-bucket value approach, holding both quality value companies trading at bargains and deeply discounted deep value businesses. Market volatility is creating more attractive entry points for patient value investors as many businesses are being priced for a meaningful economic slowdown. |
Quality Deep Value Bargains Discounted Valuation |
VolatilityRecent equity market weakness and heightened volatility are selectively presenting more attractive entry points. The Investors Intelligence Sentiment Index experienced a sharp drop comparable to major market disruptions, historically serving as a contrarian indicator for positive equity results. |
Market Weakness Sentiment Contrarian Entry Points Risk Aversion | |
| 2024 Q4 |
ValueThe fund maintains its disciplined value approach using 10 Principles of Value Investing, seeking attractively priced, well-managed businesses that can grow intrinsic value throughout market cycles. The managers refuse to chase speculative stocks or those priced without sufficient margin of safety, maintaining their two-bucket approach of quality value and deep value investments. |
Value Investing Margin of Safety Intrinsic Value Quality Value Deep Value |
FoodserviceSysco Corporation represents the fund's investment in the nation's largest food service distributor, which is recovering from COVID-19 impacts through digital improvements, specialty platform growth, and AI-driven analytics. The company's specialty services generate three times more revenue per customer than traditional broadline services. |
Food Distribution Restaurant Recovery Digital Transformation Specialty Services AI Analytics | |
Insurance BrokersWillis Tower Watson exemplifies a successful turnaround story in insurance brokerage and consulting, with new CEO Carl Hess implementing restructuring to streamline operations and improve margins. The company trades at significant discounts to peers despite operational improvements. |
Insurance Brokerage Turnaround Operational Streamlining Margin Expansion Valuation Discount | |
Managed CareCentene Corporation, despite being the largest performance drag, represents a compelling value opportunity in managed health insurance with 25 million covered Americans. Management has called a peak in Medicaid medical loss ratios and clarified limited ACA exchange risk, while trading at only 8.5X earnings. |
Medicaid ACA Exchanges Medical Loss Ratio Healthcare Coverage Earnings Recovery | |
| 2024 Q3 |
ValueThe fund implements a two-bucket value strategy seeking both quality value companies trading at decent bargains and deeply discounted deep value companies with internal change agents. They establish four price targets for each stock to assess opportunities under various market conditions. |
Quality Deep Value Intrinsic Value Price Targets Bargains |
StaffingAdded Robert Half, a leading temporary staffing firm, during a cyclical downturn when temporary staffing revenue has declined for seven consecutive quarters. The company has strong competitive positioning, no debt, and $500 million cash while trading at depressed multiples. |
Temporary Staffing Cyclical Employment Consulting | |
| 2024 Q2 |
ValueThe fund focuses on quality value companies trading below intrinsic value and deeply discounted companies with internal catalysts. They seek well-managed, financially strong businesses that can grow cash flow and value over time using their 10 Principles of Value Investing approach. |
Value Investing Intrinsic Value Deep Value Quality Value Self-Help |
IndustrialsManufacturing activity has contracted for 19 of the past 20 months according to ISM Manufacturing PMI. The fund holds positions in industrial companies like J.B. Hunt Transportation Services, which is positioned to benefit from structural market share gains despite current cyclical headwinds. |
Manufacturing Transportation Intermodal Industrial Machinery PMI | |
FinancialsThe fund initiated a new position in Fidelity Information Services (FIS), a core processing software provider for banks. FIS represents a self-help story with strategic course correction and improved capital allocation after divesting Worldpay and reducing leverage. |
Financial Services Banking Software Payment Processing FinTech Core Processing | |
| 2024 Q1 |
ValueThe fund implements a two-bucket value strategy seeking both quality value companies trading at decent bargains and deeply discounted deep value companies. The approach balances high-quality companies with strong fundamentals against deeply discounted securities with self-help catalysts. |
Quality Deep Value Discounted Intrinsic Value Bargains |
Commercial Real EstateMore than $2 trillion of commercial real estate debt is set to mature between now and the end of 2028, suggesting potential for rising defaults. Distressed commercial property sales remain muted despite this looming maturity wall. |
CRE Debt Maturity Wall Defaults Distressed | |
AIMarket excitement centers on hope for an artificial intelligence driven productivity boom as a potential economic catalyst. However, the considerable costs and time required to achieve speculated future AI-related productivity benefits are being overlooked by investors. |
Productivity Technology Investment Speculation | |
Consumer FinanceConsumers have drained their excess savings with personal savings as a percentage of disposable income now at historically low levels. Auto loans, borrowing against 401(k)s, and credit card balances are all rising, as are delinquencies on repaying that debt. |
Debt Savings Delinquencies Credit Cards | |
| 2023 Q4 |
ValueFund employs a two-bucket approach seeking both quality-value companies trading at decent bargains and deeply discounted companies with poor economic returns. Focus on bottom-up stock selection using 10 Principles of Value Investing demanding low prices relative to earnings, cash flow, and intrinsic value. Quality-value businesses currently trading at deep-value-like valuations due to fundamental industry questions or company-specific overhangs. |
Quality Bargains Intrinsic Value Margin of Safety Valuations |
Credit StressCredit card delinquency and charge-off rates now above pre-pandemic levels, indicating households have depleted excess stimulus savings. High yield market priced as if no credit risks exist despite potential warning signs. Small business hiring plans have fallen to February 2021 pandemic levels, signaling possible rising unemployment and consumer challenges ahead. |
Delinquency Charge-offs Consumer Unemployment Stimulus | |
RatesYields on 10-Year Treasuries fell from close to 5% in late October to approximately 3.9% at quarter end while high yield spreads tightened significantly. Federal Reserve's monetary policy stance has turned neutral to accommodative. Mortgage rates fell from nearly 8% to approximately 7%, providing some relief but not enough to trigger housing recovery. |
Treasury Fed Monetary Policy Mortgage Spreads | |
| 2023 Q3 |
ValueThe fund employs a two-bucket value approach, investing in both high-quality companies at attractive valuations and deeply discounted companies with poor recent returns but low statistical valuations. The portfolio is deliberately constructed with these buckets in mind without relying on top-down forecasts to favor one subset over the other. |
Value Investing Deep Value Attractive Valuations Statistical Valuations Two-bucket Approach |
EnergyNOV Inc., the fund's largest holding, is a leading oilfield services company that survived the prolonged bear market from 2014 through COVID-19. The company streamlined costs, eliminated $850 million in structural fixed costs since 2019, and maintained an industry-leading balance sheet while developing new value-added products. |
Oilfield Services Energy Upcycle Cost Structure Offshore Wind Renewables | |
FinancialsFirst American Financial represents a quintessential value investment - buying a high-quality title insurance operator at an attractive valuation during a business recession. The company has taken self-help steps including exiting unprofitable operations and automating processes to boost margins. |
Title Insurance Mortgage Rates Cyclical Recovery Self-help Margin Improvement |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Sep 30, 2023 | Fund Letters | Heartland Mid Cap Value Fund | FAF | First American Financial | Financials | Insurance | Bull | NYSE | Cyclical Recovery, financials, Insurance, Mortgage, Real Estate, title insurance, Value | Login |
| Sep 30, 2023 | Fund Letters | Heartland Mid Cap Value Fund | APA|C|FFIV|KHC|NOV|UNH | NOV Inc. | Energy | Oil, Gas & Consumable Fuels | Bull | NYSE | capital returns, Cost Restructuring, deep value, energy, Offshore Wind, oilfield services, renewables, turnaround | Login |
| Sep 30, 2023 | Fund Letters | Heartland Mid Cap Value Fund | SPB | Spectrum Brands Holdings | Consumer Staples | Household Products | Bull | NYSE | business transformation, consumer staples, deep value, divestiture, Home Garden, Pet Care, Regulatory Overhang, Share Buybacks | Login |
| Jul 15, 2026 | Fund Letters | Heartland Mid Cap Value Fund | ON | ON Semiconductor Corporation | Semiconductors | Semiconductors & Semiconductor Equipment | Bull | NASDAQ | automotive, datacenter, deep value, Electric Vehicles, Industrial, margin expansion, Power management, Self Help, semiconductors, Silicon Carbide, turnaround | Login |
| Jul 15, 2026 | Fund Letters | Heartland Mid Cap Value Fund | MKTX | MarketAxess Holdings Inc. | Capital Markets | Capital Markets | Bull | NASDAQ | Capital markets, corporate bonds, Electronic Trading, Emerging markets, financials, fixed income, free cash flow yield, International, margin expansion, market share gains, operating leverage, Quality Value | Login |
| Jul 15, 2026 | Fund Letters | Heartland Mid Cap Value Fund | IFF | International Flavors & Fragrances Inc. | Specialty Chemicals | Specialty Chemicals | Bull | New York Stock Exchange | deep value, Flavors, Fragrances, Free Cash Flow, margin expansion, market share, materials, portfolio optimization, Pricing power, Self Help, Share Buyback, specialty chemicals, turnaround | Login |
| Jan 12, 2026 | Fund Letters | Colin McWey | JBHT | J.B. Hunt Transport Services, Inc. | Industrials | Transportation | Bull | NASDAQ | buybacks, Cyclicality, Freight, Intermodal, scale | Login |
| Jan 12, 2026 | Fund Letters | Colin McWey | MKTX | MarketAxess Holdings Inc. | Financials | Capital Markets | Bull | NASDAQ | Bonds, Electronictrading, Operatingleverage, rerating, scale | Login |
| Jan 12, 2026 | Fund Letters | Colin McWey | KMB | Kimberly-Clark Corporation | Consumer Staples | Household Products | Neutral | New York Stock Exchange | Allocation, Integration, Risk, Staples, valuation | Login |
| Oct 9, 2025 | Fund Letters | Colin McWey | DHI | D.R. Horton, Inc. | Consumer Discretionary | Homebuilding | Bull | NYSE | affordability, Book Value, buybacks, homebuilding, Orders, ROIC, scale | Login |
| Oct 9, 2025 | Fund Letters | Colin McWey | LRCX | Lam Research Corporation | Information Technology | Semiconductor Equipment | Bull | NASDAQ | CapEx, consolidation, Etch, market share, Semicap, services, Upcycle | Login |
| Sep 30, 2025 | Fund Letters | Heartland Mid Cap Value Fund | DHI | D.R. Horton | Consumer Discretionary | Homebuilding | Bull | NYSE | capital allocation, deep value, Entry-level Housing, homebuilder, Manufacturing Model, ROE, Scale Advantages, share repurchases, Speculative Inventory | Login |
| Sep 30, 2025 | Fund Letters | Heartland Mid Cap Value Fund | LRCX | Lam Research | Information Technology | Semiconductor Equipment | Bull | NASDAQ | Cyclical Upcycle, Etch Process, industry consolidation, market share gains, Memory Customers, Quality Value, recurring revenue, Semicap, semiconductor equipment | Login |
| Sep 30, 2025 | Fund Letters | Heartland Mid Cap Value Fund | CNC | Centene | Health Care | Managed Health Care | Bull | NYSE | ACA Healthcare Exchanges, Healthcare Affordability, managed care, Margin Restoration, Political Pressure, Pricing Actions, Risk Pool Shift, Short-tailed Liabilities | Login |
| Jul 11, 2025 | Fund Letters | Colin McWey | EG | Everest Group, Ltd. | Financials | Reinsurance | Bull | New York Stock Exchange | Pricing, Reinsurance, turnaround, underwriting, valuation | Login |
| Jul 11, 2025 | Fund Letters | Colin McWey | HUBB | Hubbell Incorporated | Industrials | Electrical Components & Equipment | Bull | New York Stock Exchange | Destocking, Electrical, Grid, Margins, utilities | Login |
| Mar 31, 2025 | Fund Letters | Heartland Mid Cap Value Fund | TDY | Teledyne Technologies, Inc. | Information Technology | Electronic Equipment, Instruments & Components | Bull | NYSE | Aerospace, defense electronics, high barriers to entry, Instrumentation, Machine vision, Quality Value, secular growth, Sensing Technologies | Login |
| Mar 31, 2025 | Fund Letters | Heartland Mid Cap Value Fund | MIDD | The Middleby Corporation | Industrials | Machinery | Bull | NASDAQ | Activist Investment, Brand Integration, Commercial Foodservice, Food processing equipment, Industrial Equipment, margin expansion, spin-off, valuation discount | Login |
| Mar 31, 2025 | Fund Letters | Heartland Mid Cap Value Fund | PRGO | Perrigo Co. PLC | Health Care | Pharmaceuticals | Bull | NYSE | Healthcare Policy, Manufacturing Consolidation, margin expansion, Over-the-counter, Preventive Healthcare, Self-Care Products, Store Brands, valuation gap | Login |
| Mar 31, 2025 | Fund Letters | Heartland Mid Cap Value Fund | TDY | Teledyne Technologies, Inc. | Scientific & Technical Instruments | Electronic Equipment, Instruments & Components | Bull | New York Stock Exchange | Aerospace, defense electronics, high barriers to entry, Machine vision, Precision Instrumentation, Quality Value, secular growth, Sensing Technologies | Login |
| Mar 31, 2025 | Fund Letters | Heartland Mid Cap Value Fund | MIDD | The Middleby Corporation | Specialty Industrial Machinery | Machinery | Bull | NASDAQ | Activist Investment, Brand Integration, Commercial Foodservice, Food processing equipment, margin expansion, spin-off, turnaround, valuation discount | Login |
| Mar 31, 2025 | Fund Letters | Heartland Mid Cap Value Fund | PRGO | Perrigo Co. PLC | Drug Manufacturers - Specialty & Generic | Pharmaceuticals | Bull | New York Stock Exchange | Government Policy, Healthcare Reform, Infant Formula, Manufacturing Consolidation, Over-the-counter, preventive care, Self-care, Store Brand | Login |
| Dec 31, 2024 | Fund Letters | Heartland Mid Cap Value Fund | SYY | Sysco Corporation | Consumer Staples | Food Distributors | Bull | NYSE | AI Analytics, capital returns, Digital transformation, food distribution, market share expansion, Specialty Services, Value | Login |
| Dec 31, 2024 | Fund Letters | Heartland Mid Cap Value Fund | WTW | Willis Towers Watson | Financials | Insurance Brokers | Bull | NASDAQ | insurance brokerage, margin expansion, Operational Restructuring, Peer Discount, turnaround, Value | Login |
| Dec 31, 2024 | Fund Letters | Heartland Mid Cap Value Fund | CNC | Centene Corporation | Health Care | Managed Health Care | Bull | NYSE | ACA Exchanges, insider buying, managed care, Medicaid, Medical Loss Ratio, political risk, Value | Login |
| Sep 30, 2024 | Fund Letters | Heartland Mid Cap Value Fund | RHI | Robert Half International, Inc. | Industrials | Human Resource & Employment Services | Bull | NYSE | cash generation, Cyclical, debt-free, Human Resources, professional services, shareholder returns, Staffing, Value | Login |
| Sep 30, 2024 | Fund Letters | Heartland Mid Cap Value Fund | SNN | Smith & Nephew plc | Health Care | Health Care Equipment | Bull | LSE | healthcare, Manufacturing efficiency, margin expansion, Medical devices, Operational Improvement, Orthopedics, turnaround, Value | Login |
| Sep 30, 2024 | Fund Letters | Heartland Mid Cap Value Fund | DG | Dollar General Corporation | Consumer Staples | General Merchandise Stores | Bear | NYSE | Competitive pressure, discount retail, exit, Low-Income Consumers, margin compression, Rural Markets, Tax Loss Harvesting, Walmart Competition | Login |
| Jun 30, 2024 | Fund Letters | Heartland Mid Cap Value Fund | FIS | Fidelity Information Services, Inc. | Information Technology | Data Processing & Outsourced Services | Bull | NASDAQ | Banking Software, cross-selling, debt reduction, financial technology, recurring revenue, Self Help, turnaround, Value | Login |
| Jun 30, 2024 | Fund Letters | Heartland Mid Cap Value Fund | SRCL | Stericycle, Inc. | Industrials | Environmental & Facilities Services | Bull | NASDAQ | acquisition target, debt reduction, Medical Waste, operational efficiency, organic growth, Self Help, turnaround, Value | Login |
| Jun 30, 2024 | Fund Letters | Heartland Mid Cap Value Fund | JBHT | J.B. Hunt Transportation Services, Inc. | Industrials | Trucking | Bull | NASDAQ | Asset Utilization, Cost advantage, Cyclical Recovery, Freight, Intermodal Transportation, market share gains, Self Help, Value | Login |
| Mar 31, 2024 | Fund Letters | Heartland Mid Cap Value Fund | DCI | Donaldson Company Inc. | Industrials | Industrial Machinery | Bull | NYSE | Consumables, Cyclical Recovery, filtration, industrial machinery, life sciences, margin expansion, Quality Value | Login |
| Mar 31, 2024 | Fund Letters | Heartland Mid Cap Value Fund | HSY | The Hershey Company | Consumer Staples | Packaged Foods & Meats | Bull | NYSE | brand portfolio, Chocolate, Cocoa Inflation, Confectionery, consumer staples, Cyclical Recovery, Pricing power | Login |
| Mar 31, 2024 | Fund Letters | Heartland Mid Cap Value Fund | PRGO | Perrigo Company PLC | Health Care | Pharmaceuticals | Bull | NYSE | Consumer-health, deep value, Infant Formula, margin expansion, portfolio optimization, Private-label, Self Help, turnaround | Login |
| Dec 31, 2023 | Fund Letters | Heartland Mid Cap Value Fund | NTRS | Northern Trust Corporation | Financials | Asset Management & Custody Banks | Bull | NASDAQ | asset management, Custody Banks, fee-based revenue, financial services, interest rate sensitivity, Quality Value, wealth management | Login |
| Dec 31, 2023 | Fund Letters | Heartland Mid Cap Value Fund | CNC | Centene Corporation | Health Care | Managed Health Care | Bull | NYSE | EPS growth, Government Healthcare, Leadership Change, Managed Healthcare, Medicaid, Medicare Advantage, turnaround | Login |
| Dec 31, 2023 | Fund Letters | Heartland Mid Cap Value Fund | CABO | Cable One Inc | Communication Services | Cable & Satellite | Bull | NYSE | broadband, cable, Customer Acquisition, Cyclical Value, EV/EBITDA, housing cycle, interest rate sensitivity, Rural Markets | Login |
| TICKER | COMMENTARY |
|---|---|
| ON | ON Semiconductor (ON) manufactures power management and image sensing semiconductor products for automotive and industrial end markets. ON is a leader in silicon carbide semiconductors, which are used primarily in electric vehicles (EVs), renewable energy inverters, and high-power industrial equipment to reduce energy loss and improve efficiency. ON endured a cyclical deceleration in its auto and clean-energy-related markets that began in 2023. Throughout the downturn, management implemented a robust self-help playbook that optimized the company's manufacturing footprint and product portfolio for both a cyclical upturn and secular growth drivers. This included a new product platform with much higher profit margins than the existing business. More recently, the company has gained market share with leading global EV manufacturers, enjoying outsized representation in newer car models. In AI datacenters, power voltage requirements are rising, helping to drive adoption for ON's next-generation power management solutions. However, investors counting on rapid datacenter-related growth should keep in mind that, even in the most optimistic scenarios, datacenter-related revenue will be a materially smaller percentage of ON's sales compared to its core automotive and industrial end markets. Nevertheless, the market was willing to capitalize future datacenter benefits in short order. After more than doubling in price by early June, the stock reached our price target, and we reduced our weighting. We acknowledge that multiple drivers for ON have come together simultaneously, creating potential for an intrinsic value scenario. We intend to maintain a reasonably sized position. |
| MKTX | While ON was one of the Fund's top contributor last quarter, the biggest detractor to our Strategy's performance was MarketAxess Holdings (MKTX), a position we initiated in the first quarter and built in the second quarter. MKTX operates the largest U.S. corporate bond e-trading platform. It sits in a market blind spot—neither championed as an AI winner nor penalized by the AI disruption narrative—offering a high-quality, attractively valued profile with self-help-driven margin expansion potential. However, current macro conditions are a headwind. Heavy primary bond issuance volume, much of it financing the AI boom, alongside tighter credit spreads, has temporarily diverted trading volume away from MKTX's core secondary market. Why do we remain confident in MKTX? First, the company is exiting a heavy investment cycle that historically pressured margins, setting up strong operating leverage as the pace of spending plateaus and volumes improve. Second, industry trading data indicates market share gains across a key U.S. credit trading protocol where the company investments have been focused. Third, MKTX holds distinct scale advantages in developed international and emerging markets, where electronic trading penetration is still low by comparison to the U.S. Valuation is also highly compelling: the stock trades at 8.8X consensus 2026 Enterprise Value/EBITDA versus a domestic peer median of 14.0X. Despite its superior profit margins and balance sheet, MarketAxess yields over 8% on a FCF/EV basis and is well-positioned for a multi-year profit growth cycle. |
| IFF | A new deep-value holding is International Flavors and Fragrances (IFF), a specialty ingredient producer that sells flavors, fragrances, and enzymes to food, beverage, personal care, household products, and human health product manufacturers. This is an example of identifying a self-help opportunity through bottom-up research. For more than two years, management has worked on streamlining IFF's portfolio and operations to focus on higher-margin businesses where it enjoys leading market share, better pricing power, attractive growth, and significantly enhanced capital allocation flexibility. This strategy follows years of wayward capital allocation executed by prior management. Today, IFF's revenue is evenly split across three segments. Taste accounts for 30% of profits, Health & Biosciences generates 37%, and Scent contributes 32%. In the Scent segment, IFF's pioneering of encapsulated fragrance technology secured its leadership in fabric care, a position now expanding into scent boosters, shampoos, and body washes. Driven by improving growth, margins, and free cash flow, we believe IFF is poised to operationally resemble industry leader Givaudan. Yet while Givaudan trades at 19.14X forward EBITDA, IFF trades at a steep discount of just 12.23X. Highlighting management's confidence in this valuation gap closing, the company recently instituted its first share buyback program in six years. |
| WDC | Western Digital Corporation was one of the top contributors to the Russell Midcap Value Index in the quarter, with shares appreciating 118.81%. The company is a NAND flash memory manufacturer that soared nearly 230% in the quarter and accounted for roughly half of all Tech sector gains and more than a quarter of total index return. |
| GLW | Corning Inc. was among the top contributors to the Russell Midcap Value Index, with shares appreciating 62.57% in the quarter. |
| FLEX | Flex Ltd was among the top contributors to the Russell Midcap Value Index, with shares appreciating 147.59% in the quarter. |
| HPE | Hewlett Packard Enterprise Co. was among the top contributors to the Russell Midcap Value Index, with shares appreciating 89.46% in the quarter. |
| HUM | Humana Inc. was among the top contributors to the Russell Midcap Value Index, with shares appreciating 120.09% in the quarter. |
| URI | United Rentals, Inc. was among the top contributors to the Russell Midcap Value Index, with shares appreciating 55.50% in the quarter. |
| TER | Teradyne, Inc. was among the top contributors to the Russell Midcap Value Index, with shares appreciating 47.34% in the quarter. |
| HOOD | Robinhood Markets, Inc. Class A was among the top contributors to the Russell Midcap Value Index, with shares appreciating 44.70% in the quarter. |
| DAL | Delta Air Lines, Inc. was among the top contributors to the Russell Midcap Value Index, with shares appreciating 40.88% in the quarter. |
| BK | Bank of New York Mellon Corp. was among the top contributors to the Russell Midcap Value Index, with shares appreciating 21.01% in the quarter. |
| CNC | Centene Corporation was among the top contributors to the Russell Midcap Value Index, with shares appreciating 96.06% in the quarter. |
| CSX | Railroads offer a useful example. The Baltimore and Ohio Railroad was built nearly two centuries ago, yet its modern owner, CSX, along with the remaining North American Class I railroads, only became attractive long-term investments after more than a century of consolidation created regional duopolies. Investors betting on the importance of railroads were not wrong thematically, but attractive returns were far from assured. Today's AI infrastructure boom may follow a similar pattern. |
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