Third Avenue Management, an investment management company based in New York City, released its “Third Avenue Real Estate Value Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. For the six months ended June 30, 2025, the fund returned +6.38% (after fees) compared to +6.66% (before fees) for the FTSE EPRA NAREIT Developed Index. The fund generated an annualized return of +8.94% (after fees) since its inception in 1998. For more information on the fund’s top picks in 2025, please check its top five holdings.
In its second-quarter 2025 investor letter, Third Avenue Real Estate Value Fund highlighted stocks such as WESCO International, Inc. (NYSE:WCC). WESCO International, Inc. (NYSE:WCC) offers business-to-business distribution, logistics services, and supply chain solutions. The one-month return of WESCO International, Inc. (NYSE:WCC) was 2.48%, and its shares gained 32.67% of their value over the last 52 weeks. On August 7, 2025, WESCO International, Inc. (NYSE:WCC) stock closed at $206.26 per share, with a market capitalization of $10.037 billion.
Third Avenue Real Estate Value Fund stated the following regarding WESCO International, Inc. (NYSE:WCC) in its second quarter 2025 investor letter:
“When considering the above factors and the significant volatility for all things “trade related” more recently, the Fund opted to increase its holdings in Prologis Inc. (“Prologis”) and WESCO International, Inc. (NYSE:WCC) during the quarter.
Wesco is a real estate-related business that is primarily involved with commercial distribution, logistics services, and supply-chain solutions—with a leading position in the distribution of parts and components underpinning electrical, communications, and utility-related property in North America. The company is also well-capitalized, in our view, with a cash generative business that provided more than $1.2 billion of pre-tax operating profit last year, or nearly 4.5 times its fixed-charges, thus leaving plenty of excess capital for tuck-in acquisitions, dividends, and share repurchases.
In the company’s 100-plus year history, “the stars” have rarely been as aligned as they are today, though. Why so? Well, the company has finally paid off the high-cost capital associated with the untimely closing of its acquisition of Anixter in 2020. More importantly though, Wesco’s distribution business is focused on three segments that seem to be on the verge of a step-change in capital spending due to secular changes (as well as policy changes) driving reshoring, grid upgrades, and data center investments.
At the same time though, Wesco common remains modestly priced, in our view, trading at nearly a 20% discount to a conservative estimate of NAV at quarter-end. Looked at through another lens, Wesco’s stock price implied a “free cash flow yield” exceeding 8% and an “EV to EBITDA” multiple of less than 9.0 times—the latter of which is well below comparable multiples for private market transactions in the rapidly consolidating distribution space.”
A team of professionals operating high and medium voltage project design.
WESCO International, Inc. (NYSE:WCC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held WESCO International, Inc. (NYSE:WCC) at the end of the first quarter, which was 62 in the previous quarter. While we acknowledge the risk and potential of WESCO International, Inc. (NYSE:WCC) 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 WESCO International, Inc. (NYSE:WCC) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered WESCO International, Inc. (NYSE:WCC) and shared the list of cheap mid-cap stocks to add to your portfolio. 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.
