Fourth Quarter 2025 Commentary

Carters was a top 2025 decliner due to soft demand for children's apparel and tariff uncertainty, and remains among the largest discounts in the portfolio.

“The Fund’s top decliners in 2025 were Carters (ticker: CRI), Kelly Services, and ManpowerGroup (ticker: MAN). Carters was affected by soft demand for children’s apparel and tariff uncertainty. Kelly and Manpower suffered from the staffing downturn and remain among the largest discounts in our portfolio.”

Heartland Express was a top Q4 contributor as the fund views it as stabilizing, citing bottoming and rising trucking rates, expected supply discipline from capacity reductions and stricter regulation, and a strengthening balance sheet with net debt reduced 60% over three years.

“One of the Fund’s top contributors in the fourth quarter was Heartland Express (ticker: HTLD). While the freight recession has been severe, Heartland’s operating results appear to be stabilizing. Trucking rates have shown signs of bottoming and are beginning to increase from very depressed levels. There is growing optimism that ongoing capacity reductions will support more meaningful pricing improvement in 2026.”

ManpowerGroup was a top 2025 decliner due to the staffing downturn and remains among the largest discounts in the portfolio.

“The Fund’s top decliners in 2025 were Carters (ticker: CRI), Kelly Services, and ManpowerGroup (ticker: MAN). Carters was affected by soft demand for children’s apparel and tariff uncertainty. Kelly and Manpower suffered from the staffing downturn and remain among the largest discounts in our portfolio.”