Group 1 - Black Bear Value Fund reported a return of +0.2% in December 2025, resulting in a total return of -12.6% for the year, while the S&P 500 returned +0.1% in December and +17.9% for 2025 [1] - The Fund has experienced a loss of 10-15% over the past two years in a rising market environment, indicating a divergence from the S&P 500 index [1] - The Fund's portfolio includes several strong names that are currently not favored by the market, with expectations of a significant rerating as they approach the end of a capital-investment cycle [1] Group 2 - Warrior Met Coal, Inc. (NYSE:HCC) is highlighted as a leading metallurgical coal producer, with a market capitalization of $4.717 billion [2] - The stock of Warrior Met Coal closed at $89.02 per share on February 6, 2026, with a one-month return of -4.717% and a twelve-month increase of 68.05% [2] - The company has seen minimal worldwide met coal resource development over the last decade, which may lead to tight supply and higher pricing when steel production improves [3] - Warrior Met Coal is currently investing the majority of its free cash flow into a capital project expected to conclude in 2025, which is ahead of schedule, suggesting a potential for significant cash flow generation post-investment [3]

Core Insights - Black Bear Value Fund reported a return of +0.2% in December 2025, resulting in a total return of -12.6% for the year, while the S&P 500 returned +0.1% in December and +17.9% for 2025 [1] - The Fund has underperformed by 10-15% over the past two years in a rising market, indicating a divergence from index performance expectations [1] - The Fund anticipates a significant rerating of its holdings as they are at the end of a capital-investment cycle, despite current market conditions not being favorable [1] Company Insights: Builders FirstSource, Inc. (NYSE:BLDR) - Builders FirstSource, Inc. experienced a one-month return of 0.27% but saw a decline of 20.10% over the last 52 weeks, closing at $124.42 per share with a market capitalization of $13.758 billion on February 6, 2026 [2] - The company faced a 28% decline in 2025 due to weakness in the housing market and pressure from new home starts, yet it is expected to generate significant free cash flow between $800 million and $1 billion in 2025, translating to a trailing yield of 7-9% [3] - The long-term investment thesis for Builders FirstSource remains intact, with expectations of higher cash flows when housing starts improve, despite potential short-term stock fluctuations [3]