Miller Value Partners, an investment management company, released its “Deep Value Strategy” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The year 2025 has been unpredictable. After setting new highs in mid-February, the market saw a double-digit decline towards the end of the quarter, capping off a strong start to the year. As the administration implemented global tariffs, sentiment swiftly deteriorated due to growing economic uncertainty. In the quarter, the Deep Value Select strategy had a -12.8% drawdown compared to -.2% return for the S&P 1500 Value Index and -9.9% return for the S&P 600 Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Miller Value Deep Value Strategy highlighted stocks such as Gray Television, Inc. (NYSE:GTN). Gray Television, Inc. (NYSE:GTN) is a television broadcasting company that operates television stations and digital assets. The one-month return of Gray Television, Inc. (NYSE:GTN) was -30.49%, and its shares lost 45.85% of their value over the last 52 weeks. On April 22, 2025, Gray Media, Inc. (NYSE:GTN) stock closed at $3.26 per share with a market capitalization of $367.865 million.
Miller Value Deep Value Strategy stated the following regarding Gray Media, Inc. (NYSE:GTN) in its Q1 2025 investor letter:
“During the quarter, the strategy’s largest positive contributor was Gray Media, Inc. (NYSE:GTN), with shares up +37%. Gray significantly lagged the strategy during the back half of 2024. While the company’s political advertising led the overall market, it fell below market expectations. Gray continues to generate strong free cash flow and successfully paid down more than $500M of debt during the past year. While the company has significant debt leverage, Gray has a much smaller amount of debt maturities over the next two years. Marketplace expectations for Gray’s future retransmission revenues remain very low providing a nice ongoing variant as management focuses on improving long-term retransmission agreements. Near-term risks include an advertising recession; auto advertising may be weaker over the coming months; however local advertising has so far remained resilient. Gray has the potential to deliver strong free cashflow next year and $2B+ over the coming 5 to 6 years. Ongoing debt reduction should accrue to the equity over time. We see long-term upside potential multiples of the current share price.”
A satellite dish with a view to the night sky, preparing to receive transmissions.
Gray Media, Inc. (NYSE:GTN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. Our database shows that 26 hedge fund portfolios held Gray Media, Inc. (NYSE:GTN) at the end of the fourth quarter, compared to 24 in the third quarter. Gray Television, Inc.’s (NYSE:GTN) Q4 2024 revenue increased 21% year-over-year to $1 billion. While we acknowledge the potential of Gray Media, Inc. (NYSE:GTN) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we covered Gray Media, Inc. (NYSE:GTN) and shared the list of best dividend penny stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.