Core Insights - Ariel Fund's third-quarter 2025 performance was strong, returning +12.39%, outperforming the Russell 2500 Value Index's +8.17% but lagging behind the Russell 2000 Value Index's +12.60% [1] - The rally in U.S. equities was driven by the Federal Reserve's first rate cut of the year, strong corporate earnings, and increased market participation, particularly in technology and small-cap stocks [1] Company Highlights: Resideo Technologies, Inc. (NYSE:REZI) - Resideo Technologies, Inc. reported a one-month return of 6.60% and a remarkable 115.20% increase in share value over the past 52 weeks, closing at $43.47 with a market capitalization of $6.467 billion on October 23, 2025 [2] - The company exceeded expectations in organic revenue, EBITDA, and adjusted EPS, and finalized an agreement with Honeywell, removing future financial obligations [3] - Ariel Fund views Resideo as undervalued, with long-term growth potential driven by rising demand for smart home solutions and ongoing product innovation [3] Financial Performance - Resideo Technologies, Inc. achieved record net revenue of $1.94 billion in Q2 2025, reflecting a 22% year-over-year increase and an 8% organic growth [4] - Despite its potential, Resideo is not among the top 30 most popular stocks among hedge funds, with 25 hedge fund portfolios holding its stock at the end of Q2 2025, down from 27 in the previous quarter [4]

Group 1 - Resideo Technologies, Inc. (NYSE:REZI) is recognized for its comfort, energy management, and security solutions, along with low-voltage and smart home products [2] - The company has shown solid quarterly earnings results, highlighted by organic revenue growth and margin expansion, indicating a positive financial performance [2] - Resideo is expected to mitigate tariff-related headwinds through price increases, inventory repositioning, and varying factory utilization rates, showcasing proactive management strategies [2] Group 2 - The integration of Snap One has exceeded expectations, contributing to Resideo's growth and operational synergies [2] - There is a growing market preference for connected smart home solutions, positioning Resideo for sustainable growth driven by product innovation [2] - Despite the positive outlook for Resideo, some analysts suggest that certain AI stocks may offer greater upside potential with less downside risk [2]

Core Insights - Choice Hotels Canada has a legacy since 1955 and the recent acquisition marks a significant milestone in its 70-year history, positioning the company for accelerated growth in Canada [1][2] - The acquisition, valued at approximately $112 million, was completed in July 2025 and is expected to generate around $23 million in fee revenue and $18 million in EBITDA for the full year 2025 [2][6] - The Canadian hospitality market is projected to grow at an average annual rate exceeding 5% through 2030, reaching over $50 billion, which presents a strong opportunity for Choice Hotels to expand its market share across its 22 brands [2] Company Operations - Brian Leon, CEO of Choice Hotels Canada, will continue to lead the Canadian operations, with InnVest Hotels remaining a key partner, owning and operating 50 Comfort hotels nationwide [3] - The company aims to expand its owner success system from 8 hotel brands to a full portfolio of 22 brands, creating remarkable opportunities for franchisees and guests [2] Global Expansion - The investment accelerates Choice Hotels' growth outside the United States, with a 5% increase in its net international rooms portfolio to over 140,000 rooms as of Q2 2025 [4] - Major developments include extending a master franchise agreement in Brazil for over 10,000 rooms, nearly tripling room count in France, and signing agreements in China expected to add over 19,500 rooms in the next five years [4] Company Overview - Choice Hotels International, Inc. is one of the largest lodging franchisors globally, with nearly 7,500 hotels and approximately 650,000 rooms across 46 countries and territories [5] - The company offers a diverse portfolio of 22 brands, catering to various traveler needs and driving value for franchise owners and shareholders [5]

Q1 2025 Performance Highlights - Unilever Power Brands achieved 3.0% underlying sales growth (USG), driven by 1.3% underlying volume growth (UVG) and 1.7% underlying price growth (UPG)[9] - Beauty & Wellbeing turnover reached €3.3 billion, with 4.1% USG, comprising 1.5% UVG and 2.5% UPG[15, 16] - Personal Care reported 5.1% USG, with 2.4% UVG and 2.7% UPG, fueled by strong Dove performance[21] - Home Care experienced 1.0% USG, with flat UVG and 0.9% UPG, impacted by destocking in Brazil and business resets in China & Indonesia[24] - Foods saw a 1.6% USG, with (1.1)% UVG and 2.7% UPG, affected by a decline in Unilever Food Solutions (UFS) China due to the timing of Chinese New Year[28] - Ice Cream achieved 1.8% USG, with (0.5)% UVG and 2.2% UPG, driven by innovation and operational improvements[30] Regional Performance - North America showed 6.2% USG, with 4.0% UVG and 2.1% UPG, representing 22% of Group turnover[34] - Europe reported 3.2% USG, with 3.0% UVG and 0.2% UPG, accounting for 20% of Group turnover[34] - Latin America experienced 1.5% USG, with (3.0)% UVG and 4.6% UPG, representing 14% of Group turnover[34] - Asia Pacific Africa achieved 2.0% USG, with 0.6% UVG and 1.3% UPG, accounting for 44% of Group turnover[34] Financial Outlook and Strategic Initiatives - Q1 2025 turnover was €14.8 billion, a (0.9)% decrease including a (2.7)% impact from net disposals[36] - Unilever reconfirmed its full-year 2025 financial outlook, projecting underlying sales growth within the 3-5% range and modest improvement in underlying operating margin[39, 40] - The separation of the Ice Cream business is on track to be completed by the end of 2025, with operational separation by July 1st and reporting as a discontinued operation from Q4[37, 38]

Core Insights - Choice Hotels is focused on enhancing the Comfort and Country Inn & Suites brands by providing value to both owners and guests, leveraging brand recognition and franchisee support [1] - Extensive owner feedback and customer studies have led to refreshed brand identities and prototypes aimed at improving hotel performance and guest satisfaction [1][6] Brand Overview - Comfort brand has over 2,100 locations and 122 in the pipeline, offering a welcoming atmosphere for business and family travelers [2] - Country Inn & Suites emphasizes generous hospitality with a residential ambiance, featuring friendly service and complimentary offerings like freshly baked cookies [3][13] Prototype Enhancements - The updated prototype for both brands includes intuitive designs, refined furniture, and energizing color schemes to enhance guest experiences [3][4] - Country Inn & Suites' prototype adds three keys within the existing footprint and reduces the time to open hotels by 30% through streamlined ordering processes [4][5] Performance Metrics - Country Inn & Suites reported a 19-point increase in RevPAR Index and a 20% rise in direct online contributions, alongside growth in revenue from group and business travelers [7] - Choice Hotels achieved the opening of 107 hotels across its upper midscale segment last year, indicating strong development growth [7] Franchisee Support - Choice Hotels provides franchisees with tools like ChoiceMAX for revenue management and ChoiceConnect for property management, aimed at maximizing financial gains [8] - The company’s direct channels, including ChoiceHotels.com and the mobile app, have seen increased booking conversion rates, enhancing franchisee revenue potential [9] Loyalty Program - Both Comfort and Country Inn & Suites participate in the Choice Privileges rewards program, which has over 69 million members and access to more than 7,100 hotels globally [9] Company Overview - Choice Hotels International operates over 7,500 hotels across 46 countries, with a diverse portfolio of 22 brands catering to various traveler needs [11] - The Comfort brand has been a trusted name for over 40 years, known for its smoke-free properties and complimentary amenities [12]