Black Bear Value Partners, an investment management firm, published its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Black Bear Value Fund returned -7.1% in September and -1.0% in the quarter, and -12.7% YTD. The S&P 500 returned +3.6% September, +8.1% in the quarter, and +14.8% year-to-date. HFRI Value Index returned +1.3% in September, +5.9% in the quarter, and +13.7% year-to-date. In addition, please check the fund’s top five holdings to know its best picks in 2025. ...

Core Insights - The Black Bear Value Fund has underperformed compared to broader indices, returning -12.7% year-to-date against the S&P 500's +14.8% [11] - The fund's strategy focuses on long-term investments in underappreciated businesses, particularly in sectors currently facing challenges but with potential for recovery [4][28] Performance Overview - The Black Bear Value Fund returned -7.1% in September, -1.0% for the quarter, and -12.7% year-to-date [11] - In contrast, the S&P 500 returned +3.6% in September, +8.1% for the quarter, and +14.8% year-to-date [11] Investment Strategy - The fund emphasizes a private investing mindset, looking beyond short-term market noise to identify long-term value [4] - The portfolio is heavily weighted in sectors like homebuilding, chemical production, and metallurgical coal, which are currently underperforming but have long-term growth potential [4][28] Key Holdings Builders FirstSource (BLDR) - BLDR is experiencing a structural housing shortage in the USA, with management reducing their 2025 cash flow outlook from $800 million-$1.2 billion to $800 million-$1 billion [6][8] - The company has shifted focus to value-added products, which now account for over 40% of revenue, and has been actively buying back stock [7][9] Flagstar Financial (FLG) - FLG has undergone a significant turnaround, raising over $1 billion in capital and stabilizing its balance sheet [12][13] - The bank is trading at approximately 65% of a conservatively marked balance sheet, with potential for a 50-150% increase in value over the next 1-3 years [15] Lanxess (LXS.DE) - LXS has shifted its focus from cyclical, capital-intensive businesses to more stable, lower-capital businesses, increasing its US sales from 15% to nearly 30% [17] - The company is expected to generate €200-250 million in free cash flow in a normalized environment, with a potential cash inflow of €500 million from a joint venture [19][20] Tidewater (TDW) - TDW operates one of the largest fleets of offshore support vessels, with a strong long-term outlook despite near-term uncertainties [21] - The company is currently generating over $300 million in free cash flow, with expectations to increase this to $500 million-$1 billion in a normalized environment [23] Warrior Met Coal (HCC) - HCC is investing heavily in the Blue Creek mine, which is expected to significantly boost free cash flow once the investment period concludes [24][25] - The company anticipates generating $200 million-$850 million in annual free cash flow post-investment, translating to a 6-25% unlevered annual free cash flow yield [26][27]

Core Viewpoint - Tidewater Inc. (NYSE:TDW) is currently priced at $54.45, reflecting a 0.83% increase in the current market session, but has experienced a decline of 12.52% over the past month and 22.90% over the past year, raising questions about whether the stock is undervalued despite the company's current performance [1]. Group 1: P/E Ratio Analysis - The P/E ratio is a critical metric that compares the current share price to the company's earnings per share (EPS), helping long-term investors assess the company's performance against historical data and industry benchmarks [5]. - Tidewater's P/E ratio is lower than the aggregate P/E of 23.04 for the Energy Equipment & Services industry, suggesting that the stock may be undervalued, even though it could also indicate expectations of poorer performance compared to peers [6]. - A lower P/E ratio can imply that shareholders do not anticipate future growth, and it should not be used in isolation; other financial metrics and qualitative factors must also be considered for informed investment decisions [9].

Industry Overview - Oil and energy stocks are experiencing a notable surge, with crude prices rising above $60 a barrel due to supply constraints, geopolitical tensions, and market dynamics [1] - OPEC+ is gradually unwinding previous production cuts, limiting supply growth as demand recovers from the pandemic, while U.S. sanctions on Russian and Venezuelan oil further impact supply [2] Market Dynamics - The International Energy Agency (IEA) noted stronger-than-expected oil consumption in advanced economies for 2025, coinciding with record refinery crude throughputs in August, indicating strong demand for refined products [3] Company Analysis: California Resources (CRC) - California Resources reported robust Q2 results, exceeding EPS and sales expectations by 20%, leading to a more than 15% increase in full-year EPS estimates for fiscal 2025 and FY26 [4] - Analysts remain bullish on CRC stock, with price targets raised to between $66-$70, supported by strong revenue growth and operational discipline [5] - CRC has a 2.82% annual dividend yield, with an average price target of $65.58 suggesting a 19% upside [6] Company Analysis: NCS Multistage (NCSM) - NCS Multistage has outperformed its peers with shares skyrocketing 90% YTD, aided by a capital-light business model and geographic expansion [9] - NCS's top line is expected to increase by 8% in FY25 and FY26, with projections nearing $200 million, and EPS projected to increase 6% this year and spike another 20% in FY26 [10][11] Company Analysis: Tidewater (TDW) - Tidewater, the largest Offshore Support Vessel operator, has seen fiscal 2025 earnings estimates increase 15% recently, following a Q2 earnings surprise of 339% [13][14] - The company maintained a record average day rate per vessel of $23,000 with a gross margin of 50.1%, and TDW shares have risen over 20% in the last three months [15] - EPS is projected to climb to $5.04 next year, with revisions up 5% in the last 60 days [15] Conclusion - California Resources, NCS Multistage, and Tidewater are leading the rally in oil and energy stocks, benefiting from strong quarterly reports and rising earnings estimate revisions [17]

Core Insights - The logistics sector has seen significant engagement from investors, particularly in the ASEAN and US markets, highlighting its growth potential [1] - The popularity of insurance companies in the Philippines since 2014 indicates a shift in investment strategies among local investors [1] - The diversification of investment portfolios across various industries and market capitalizations is becoming a common practice among investors [1] Investment Trends - There is a notable trend of investing in blue-chip companies initially, followed by a broader investment strategy that includes various sectors such as banking, telecommunications, and retail [1] - The entry into the US market has been facilitated by platforms like Seeking Alpha, which provide valuable analyses for comparison with local markets [1] - The focus on retirement investments alongside trading profits suggests a dual strategy aimed at long-term financial security and short-term gains [1] Market Engagement - The logistics and shipping industries are gaining traction in both the ASEAN and US markets, reflecting their importance in global trade [1] - The experience of acting as a personal broker for a relative has increased awareness and understanding of the US market dynamics [1] - The continuous use of analytical tools from platforms like Seeking Alpha demonstrates the importance of research in making informed investment decisions [1]

Group 1 - Tidewater (TDW) closed at $59.8, with a 13% gain over the past four weeks, and a mean price target of $76 indicates a 27.1% upside potential [1] - The mean estimate includes five short-term price targets with a standard deviation of $19.79, ranging from a low of $55.00 (8% decline) to a high of $108.00 (80.6% increase) [2] - Analysts show strong agreement in revising earnings estimates higher, which correlates with potential stock price movements [11][12] Group 2 - The Zacks Consensus Estimate for the current year has increased by 15% over the last 30 days, with no negative revisions [12] - TDW holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While the consensus price target may not be reliable for exact gains, it suggests a positive direction for price movement [14]

Group 1 - Tidewater (TDW) is a notable stock in the Oils-Energy sector, currently outperforming the sector with a year-to-date return of 9.3% compared to the sector average of 3.9% [4] - The Zacks Consensus Estimate for Tidewater's full-year earnings has increased by 22.8% in the past quarter, indicating a stronger analyst sentiment and improving earnings outlook [4] - Tidewater is ranked 11 in the Zacks Sector Rank, which evaluates 240 companies across 16 sector groups [2] Group 2 - Tidewater belongs to the Oil and Gas - Integrated - United States industry, which has seen a decline of about 3.4% year-to-date, further highlighting Tidewater's relative strength [6] - Talen Energy Corporation (TLN), another stock in the Oils-Energy sector, has achieved a year-to-date return of 76.5% and has a Zacks Rank of 2 (Buy) [5] - The Alternative Energy - Other industry, to which Talen Energy belongs, has increased by 29.1% this year, ranking 184 among 41 stocks [7]

Group 1 - The focus has shifted towards offshore drilling, supply industry, and shipping, including tankers, containers, and dry bulk [1] - The fuel cell industry is being monitored as it is still in its early stages of development [1] Group 2 - The individual has extensive experience in auditing and trading, having navigated significant market events such as the dotcom bubble and the subprime crisis [2] - The research provided aims to maintain high quality despite language barriers [2]

Core Viewpoint - Tidewater (TDW) has shown a 7.3% increase in stock price over the past four weeks, with a mean price target of $74.8 indicating a potential upside of 31.5% from the current price of $56.88 [1] Price Targets and Analyst Estimates - The mean estimate consists of five short-term price targets with a standard deviation of $20.27, indicating variability among analysts; the lowest estimate is $55.00 (3.3% decline), while the highest is $108.00 (89.9% increase) [2] - A low standard deviation suggests a strong agreement among analysts regarding the stock's price movement direction, which can serve as a starting point for further research [9] Earnings Estimates and Analyst Sentiment - There is increasing optimism among analysts about TDW's earnings prospects, as indicated by a strong consensus in revising EPS estimates higher, which correlates with potential stock price increases [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has risen by 22.8%, with one estimate moving higher and no negative revisions [12] - TDW holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, suggesting a solid potential upside [13] Caution on Price Targets - While consensus price targets are often used by investors, relying solely on them may not be prudent due to historical inaccuracies in predicting stock price movements [3][7][10] - Analysts may set overly optimistic price targets influenced by business relationships, which can lead to inflated expectations [8]

Technical Analysis - Tidewater Inc. (TDW) has reached a significant support level and is considered a good pick for investors from a technical perspective due to a "golden cross" formation, where the 50-day simple moving average has broken above the 200-day moving average [1] - A golden cross indicates a bullish breakout is likely, formed when a stock's short-term moving average crosses above a longer-term moving average, typically involving the 50-day and 200-day averages [1][2] Price Movement - TDW has moved 21.9% higher over the last four weeks, suggesting potential for further upward momentum [3] Earnings Outlook - The company has a positive earnings outlook for the current quarter, with no earnings estimates decreasing in the past two months and one revision higher, leading to an increase in the Zacks Consensus Estimate [3][4] - TDW currently holds a 3 (Hold) rating on the Zacks Rank, indicating a stable position in the market [3] Investment Consideration - With a combination of positive earnings estimate revisions and a key technical level being hit, investors are encouraged to monitor TDW for potential gains in the near future [4]