Investment management company Vulcan Value Partners recently released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The first quarter experienced the return of volatility. The companies’ management teams expressed a more cautious view following the recent election. Optimism has given way to uncertainty about tariffs and potential impacts on earnings, inflation, and economic growth. In the quarter, the Large Cap Composite returned -2.1% net of fees and expenses, the Small Cap Composite returned -4.5% net, the Focus Composite returned -5.8% net, the Focus Plus composite returned -6.0% and the All-Cap Composite returned -4.1% net. For more information on the fund’s best picks in 2025, please check its top five holdings.
In its first quarter 2025 investor letter, Vulcan Value Partners emphasized stocks such as PROG Holdings, Inc. (NYSE:PRG). Based in Draper, Utah, PROG Holdings, Inc. (NYSE:PRG) is a financial technology holding company. The one-month return of PROG Holdings, Inc. (NYSE:PRG) was -1.70%, and its shares lost 19.05% of their value over the last 52 weeks. On April 14, 2025, PROG Holdings, Inc. (NYSE:PRG) stock closed at $25.50 per share with a market capitalization of $1.035 billion.
Vulcan Value Partners stated the following regarding PROG Holdings, Inc. (NYSE:PRG) in its Q1 2025 investor letter:
There was one material detractor: PROG Holdings Inc. PROG Holdings provides lease-to-own financing solutions for non-prime borrowers through a national retailer partner network. In the second half of 2024, one of its largest customers, Big Lots, declared bankruptcy and agreed to be bought by a private equity firm. In December, the sale was cancelled, forcing Big Lots to move forward with liquidation. We believe PROG’s stock price decline was far greater than the impact on origination volumes by Big Lots’ closure. Further, we expect the company will be able to offset these lost volumes with share gains at existing retailer partnerships and new customer wins.
A customer staring with delight at the variety of furniture, appliances, and other items in the store.
PROG Holdings, Inc. (NYSE:PRG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held PROG Holdings, Inc. (NYSE:PRG) at the end of the fourth quarter which was 27 in the previous quarter. While we acknowledge the potential of PROG Holdings, Inc. (NYSE:PRG) 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.
We covered PROG Holdings, Inc. (NYSE:PRG) in another article, where we shared Vulcan Value Partners’ views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q1 2025 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.