Phinia (PHIN) Stood Resilient Amid Weak End Markets

Voss Capital, LLC, an investment management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Voss Capital’s funds, Voss Value Fund, LP, and the Voss Value Offshore Fund, Ltd returned +1.0% and +0.6% to investors net of fees and expenses respectively, in the second quarter compared to a +8.5% return for the Russell 2000 Index, +5.0% return for the Russell 2000 Value Index, and +10.9% return for the S&P 500 Index. The Voss Value Master Fund’s total gross exposure stood at 165.6% and the net long exposure was 68.9% as of June 30, 2025. The weight of the fund’s top 10 longs was 66.9% and the top 10 shorts were -40.8%. 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, Voss Capital highlighted stocks such as PHINIA Inc. (NYSE:PHIN). PHINIA Inc. (NYSE:PHIN), a spin-off from BorgWarner (BWA), develops, designs, and manufactures integrated components and systems for commercial and light vehicles, and industrial applications to optimize performance, increase efficiency, and reduce emissions.  The one-month return of PHINIA Inc. (NYSE:PHIN) was 16.33%, and its shares gained 23.18% of their value over the last 52 weeks. On August 27, 2025, PHINIA Inc. (NYSE:PHIN) stock closed at $58.98 per share, with a market capitalization of $2.29 billion.

Voss Capital stated the following regarding PHINIA Inc. (NYSE:PHIN) in its second quarter 2025 investor letter:

Despite relatively weak end markets this year (heavy duty commercial vehicle and light passenger vehicle production), PHINIA Inc. (NYSE:PHIN) has been resilient thanks in part to the stability of their aftermarkets business. EBITDA is expected to be flattish this year and return to mid-single digit growth in 2026. Although the stock has re-rated somewhat post earnings, in our view it is still unfairly treated as a vulnerable, cyclical, OEM supplier purely at the whims of Uncle Sam’s auto SAAR. We think the aftermarkets business should be valued closer to 11x EBITDA (similar to DORM & ATMU) and the Fuel Systems business should be compared to Commercial Vehicle and Industrial suppliers. The company has made a concerted effort to shift coverage from auto analysts to industrials analyst which could help improve sell side valuations. At about 5.5x forward EBITDA and ~10x FCF, PHIN is cheap on an absolute basis and a relative basis. Phinia has been a standalone public company for two years as of July, which opens the door to acquisition. In the meantime, we expect PHIN to remain on the leaderboard of share cannibals, as they have already bought back ~19% of the shares outstanding since the spinoff.

In another article, we covered PHINIA Inc. (NYSE:PHIN) and shared the list of best small-cap value stocks to buy. Voss Capital added a long position in PHINIA Inc. (NYSE:PHIN) during Q3 2024. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.