Heartland Advisors, an investment management company, released its second-quarter 2026 investor letter for the “Heartland Value Plus Fund”. A copy of the letter can be downloaded here. Small-cap stocks rose in the second quarter, with the Russell 2000® Index increasing 21.49%, outpacing the 15.20% gain for the S&P 500 Index. The artificial intelligence trade continues to be a key theme in the market. Small-cap value is benefiting from a strengthening economic environment. The Value Plus Fund rose 19.25% in the second quarter, compared with the 17.19% return for the Russell 2000 Value Index, driven by strong gains from Materials, Energy, and Real Estate holdings. In addition, you can check the Fund’s top 5 holdings to determine its best picks for 2026.
In its Q2 2026 investor letter, Heartland Value Plus Fund highlighted FirstCash Holdings, Inc. (NASDAQ:FCFS). Headquartered in Fort Worth, Texas, FirstCash Holdings, Inc. (NASDAQ:FCFS) is a retail pawn store operator. On July 14, 2026, FirstCash Holdings, Inc. (NASDAQ:FCFS) closed at $210.06 per share, reflecting a market capitalization of $9.21 billion. FirstCash Holdings, Inc. (NASDAQ:FCFS) posted a one-month return of -6.73%, while its shares gained 60.05% over the past 52 weeks.
Heartland Value Plus Fund stated the following regarding FirstCash Holdings, Inc. (NASDAQ:FCFS) in its Q2 2026 investor update:
“An example of the types of prospects we are seeing outside of Tech is FirstCash Holdings, Inc. (NASDAQ:FCFS), which couldn’t be further away from the AI trade.
FirstCash is the largest pawn shop operator in the world. As many consumers struggle with rising inflation, pawn loan demand is likely to remain strong. Meanwhile, gold jewelry remains the dominant collateral asset across FirstCash store fronts. And high gold prices allow FCFS to issue larger loans and collect larger fees.
The company recently reported another strong quarter and raised guidance across the board. Pawn fees were up 39% year over year boosted by strong gold prices. Even better, management is using increased earnings to return cash to shareholders via a rising dividend in addition to stock buybacks. Better still, if the economy were to hit a speedbump, we would expect FCFS to hold up well due to its business model.
Despite its recent price appreciation, FCFS still trades at 13x EBITDA using our 2026-2027 EBITDA estimates. This is in line with its long-term averages, and we believe this demonstrates that the price appreciation is following earnings growth. Meanwhile, management continues to grow the dividend and has an active buyback program in place.”
FirstCash Holdings, Inc. (NASDAQ:FCFS) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 31 hedge fund portfolios held FirstCash Holdings, Inc. (NASDAQ:FCFS) at the end of the first quarter, up from 29 in the previous quarter. While we acknowledge the risk and potential of FirstCash Holdings, Inc. (NASDAQ:FCFS) 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 FirstCash Holdings, Inc. (NASDAQ:FCFS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered FirstCash Holdings, Inc. (NASDAQ:FCFS) and shared a bullish thesis on the company. In Q1 2026, Heartland Value Plus Fund noted that FirstCash Holdings, Inc. (NASDAQ:FCFS) is positioned to gain from rising pawn loan demand in a challenging economy. In addition, please check out our hedge fund investor letters Q2 2026 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.
