Black Bear Value Fund, an investment advisor, released its fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. In December, the Black Bear Value Fund returned +0.2%, bringing 2025 returns to -12.6%. The S&P 500 returned +0.1% in December and +17.9% in 2025. In a rising market environment, the Fund has lost 10-15% over the two years. The Fund does not aim to replicate the Index, so some performance variation is expected. Heading into 2026, the firm has several strong names in its portfolio, even though the market is not receptive to them currently. The firm expects a significant rerating in these holdings as they are at the end of a capital-investment cycle. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Black Bear Value Fund highlighted stocks such as Builders FirstSource, Inc. (NYSE:BLDR). Based in Irving, Texas, Builders FirstSource, Inc. (NYSE:BLDR) is a building material, manufactured components, and construction services provider. The one-month return of Builders FirstSource, Inc. (NYSE:BLDR) was 0.27%, and its shares lost 20.10% of their value over the last 52 weeks. On February 6, 2026, Builders FirstSource, Inc. (NYSE:BLDR) stock closed at $124.42 per share, with a market capitalization of $13.758 billion.
Black Bear Value Fund stated the following regarding Builders FirstSource, Inc. (NYSE:BLDR) in its fourth quarter 2025 investor letter:
“Builders FirstSource, Inc. (NYSE:BLDR) declined 28% in 2025 amidst weakness in the housing market and as new home starts pressured sentiment. Fundamentally, the Company performed well despite these headwinds and should generate a significant amount of free cash flow in 2025 ($800MM-$1BB). This translates to a trailing yield of 7-9%. If we owned this business privately, we would be pleased to collect a 7-9% yield in a weak year with the promise of significantly higher cashflows when housing starts pickup. We have previously discussed whether there could be short-term fluctuations with the stock, but so long as the long-term thesis was intact, we would continue to own the business.
