Here’s Heartland Value Plus Fund’s Updates on Gates Industrial Corporation plc (GTES)

Heartland Advisors, an investment management company, released its “Heartland Value Plus Fund” second quarter 2025 investor letter. A copy of the letter can be downloaded here. Although the second quarter was another tough period for small stocks, the firm is becoming more optimistic that the environment is getting better. The fund gained 1.86% in the second quarter, compared with the 4.97% gain for the Russell 2000 Value Index.  In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second quarter 2025 investor letter, Heartland Value Plus Fund highlighted stocks such as Gates Industrial Corporation plc (NYSE:GTES). Gates Industrial Corporation plc (NYSE:GTES) manufactures and distributes engineered power transmission and fluid power solutions. The one-month return of Gates Industrial Corporation plc (NYSE:GTES) was 10.59%, and its shares gained 50.22% of their value over the last 52 weeks. On July 11, 2025, Gates Industrial Corporation plc (NYSE:GTES) stock closed at $24.44 per share with a market capitalization of $6.3 billion.

Heartland Value Plus Fund stated the following regarding Gates Industrial Corporation plc (NYSE:GTES) in its second quarter 2025 investor letter:

“These are companies like Gates Industrial Corporation plc (NYSE:GTES), a leading manufacturer of belts and hoses used in vehicles and industrial machines. Following President Trump’s “Liberation Day” tariff announcement, small-cap Industrials sold off on fears of potential demand destruction. Gates wasn’t immune. The stock tumbled more than 19% between April 2 and the market’s trough on April 8, compared with the 14% decline for the S&P 600 Industrial Index. We saw this as an opportunity because we believe Gates is well positioned relative to the average small cap Industrial.

Why? Gates mostly produces in North America for U.S. customers, meaning they do less importing and exporting from Asia than their peers. That’s not to say the company is without tariff exposure. But Gates enjoys pricing power, as most of its parts are mission critical to customers, who have no choice but to replace belts and hoses that break. The company’s customers are also purchasing fewer new machines while holding onto their existing equipment longer, increasing the odds of belts and hoses wearing out. That’s good news for GTES, since 68% of the company’s revenues come from replacement of parts…” (Click here to read the full text)

A factory worker in a safety vest tightening a V-belt on a power transmission assembly.

Gates Industrial Corporation plc (NYSE:GTES) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held Gates Industrial Corporation plc (NYSE:GTES) at the end of the first quarter, which was 39 in the previous quarter. In the first quarter, Gates Industrial Corporation plc (NYSE:GTES) reported 848 million in total sales, representing a core growth of 1.4%. While we acknowledge the risk and potential of GTES as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GTES and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Gates Industrial Corporation plc (NYSE:GTES) and shared the list of cheap beginner stocks to buy. Heartland Value Plus Fund emphasized in the last quarter’s letter that Gates Industrial Corporation plc (NYSE:GTES) is set to excel compared to its competitors through various economic cycles. In addition, please check out our hedge fund investor letters Q2 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.