Third Avenue Management, an investment management company based in New York City, released its “Third Avenue Value Fund” first-quarter 2026 investor letter. A copy of the letter can be downloaded here. The fund returned 7.28% in the first quarter compared to the MSCI World Index (Net) at -3.57%, and the MSCI World Value Index (Net) at 1.18%. It had a strong three- and five-year annualized return of 16.26% and 15.38%. The letter noted that before the U.S. and Israeli military campaign in Iran, non-U.S. equities outperformed U.S. equities, value strategies performed well, and the U.S. dollar weakened. The Fund excelled then, but the subsequent outbreak of war led to a significant drop in equities. While the Fund performed better in the former environment. The firm aims to build a portfolio of undervalued, well-capitalized businesses capable of building shareholder wealth over time. The value-oriented approach has invested mostly outside the U.S. and in smaller companies in recent years. During the quarter, global markets deteriorated, creating opportunities for the Fund to add to existing holdings and initiate new positions. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Third Avenue Value Fund highlighted Tidewater Inc. (NYSE:TDW). Tidewater Inc. (NYSE:TDW) provides offshore support vessels and marine support services to the offshore energy industry. On June 18, 2026, Tidewater Inc. (NYSE:TDW) closed at $64.67 per share. One-month return of Tidewater Inc. (NYSE:TDW) was -18.44%, and its shares gained 39.08% over the past 52 weeks. Tidewater Inc. (NYSE:TDW) has a market capitalization of $3.22 billion.
Third Avenue Value Fund stated the following regarding Tidewater Inc. (NYSE:TDW) in its Q1 2026 investor letter:
“In the Fund’s Q4 2025 shareholder letter, we explained that the Fund’s energy industry exposure lies mostly within offshore energy services businesses, Tidewater Inc. (NYSE:TDW), Valaris and Subsea 7. The Fund also holds one upstream oil and gas producer, Harbour Energy. We went on to explain that “During the quarter, and 2025 more broadly, the Fund’s oil and gas related businesses mostly did not perform well.” In writing these words, we did not necessarily anticipate that each of these investments would be among the largest contributors to Fund performance in the following quarter. Counterintuitively, almost all of the performance produced by Valaris and Tidewater occurred prior to the Feb 28th onset of military action in Iran. In both cases, resource conversion activity enabled by very well-capitalized balance sheets, played a large role. Our third offshore service business Subsea 7 is also going through the process of being acquired in an industry-consolidating transaction that was announced in July 2025
Separately, during the quarter, Tidewater agreed to purchase Wilson Sons Ultratug, an owner of 22 mostly Brazilian-built platform supply vessels operating in Brazil. The all-cash transaction will give Tidewater a much larger presence in Brazil, making it one of the largest operators in one of the world’s most attractive deepwater markets. This marks the third significant consolidating acquisition conducted by Tidewater during our ownership, each of which was enabled by an amount of financial flexibility and firepower that is unrivaled within the platform supply vessel industry…” (Click here to read the full text)
Tidewater Inc. (NYSE:TDW) 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 Tidewater Inc. (NYSE:TDW) at the end of the first quarter, compared to 36 in the previous quarter. While we acknowledge the risk and potential of Tidewater Inc. (NYSE:TDW) 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 TIDEWATER INC. (NYSE:TDW) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Tidewater Inc. (NYSE:TDW) and shared the list of most profitable energy stocks to buy. In addition, please check out our hedge fund investor letters Q1 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.
