Black Bear Value Partners, an investment management firm, published its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. Black Bear Value Fund returned -9.4% in December and -1.4% in 2024 and the S&P 500 returned -2.4% in December and +25.0% in 2024. HFRI Value Index returned -1.2% in December and +11.5% in 2024. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Black Bear Value Partners highlighted stocks like Flagstar Financial, Inc. (NYSE:FLG) in the fourth quarter 2024 investor letter. Flagstar Financial, Inc. (NYSE:FLG) is a bank holding company that provides banking products and services. The one-month return of Flagstar Financial, Inc. (NYSE:FLG) was -7.50%, and its shares lost 68.60% of their value over the last 52 weeks. On January 13, 2025, Flagstar Financial, Inc. (NYSE:FLG) stock closed at $9.25 per share with a market capitalization of $3.84 billion.
Black Bear Value Partners stated the following regarding Flagstar Financial, Inc. (NYSE:FLG) in its Q4 2024 investor letter:
“Flagstar Financial, Inc. (NYSE:FLG) was down 22% in the month of December, potentially exacerbated by tax-loss selling. The fundamental story (below) did not change, and we meaningfully added to our position to take advantage of the selloff.
Flagstar Financial is the former New York Community Bank (a mashup of Flagstar Bank, New York Community Bank and assets from Signature Bank). Like our SHORT investments in Silicon Valley Bank and First Republic, FLG had a hole in their balance sheet (from soured multifamily and office real estate vs. long-duration securities). That is where the similarities end.
FLG raised over $1BB in additional capital, led by former Treasury Secretary Steven Mnuchin. They revamped the management team and brought in a superstar CEO in Joseph Otting who successfully turned around OneWest Bank post GFC (formerly known as IndyMac Bank). In 9 months, the management team has accomplished more than most teams can do in 2+ years. They have reviewed nearly all the loans on the books, sold off non-core assets raising additional capital and are focused on delivering a narrowly-focused, well-capitalized boring regional bank. In this case boring is good. Importantly, they have taken a conservative view of their loan book and a large credit reserve. This contrasts with several bank/private credit lenders we are short who have taken minimal reserves. Mr. Otting and his team are my kind of managers – they are plain-spoken, hardworking and plan for the worst while hoping for the best.”
A banker closely examining a document while seated at his desk.
Flagstar Financial, Inc. (NYSE:FLG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. While we acknowledge the potential of Flagstar Financial, Inc. (NYSE:FLG) 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 addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.