Miller Value Partners, an investment management company, released its “Deep Value Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The market rebound that began in April continued in the third quarter. Growth and momentum stocks continued to perform well, delivering double-digit returns, while the market began to broaden. Small and micro-cap value stocks achieved their best quarterly returns since Q4 2023. In the quarter, the Deep Value strategy appreciated by +26.50% compared to +6.29% return for the S&P 1500 Value Index and +11.71% return for the S&P 600 Value Index. Year-to-date, the strategy’s net returns are +9.20% vs +9.28% and +3.17%, respectively, for the indexes. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, Miller Value Deep Value Strategy highlighted stocks such as Bread Financial Holdings, Inc. (NYSE:BFH). Bread Financial Holdings, Inc. (NYSE:BFH) is a financial services company that offers tech-forward payment and lending solutions. The one-month return for Bread Financial Holdings, Inc. (NYSE:BFH) was 13.24%, and its shares gained 13.94% over the last 52 weeks. On December 04, 2025, Bread Financial Holdings, Inc. (NYSE:BFH) stock closed at $72.00 per share, with a market capitalization of $3.29 billion.
Miller Value Deep Value Strategy stated the following regarding Bread Financial Holdings, Inc. (NYSE:BFH) in its third quarter 2025 investor letter:
“Our only negative holding during the quarter was Bread Financial Holdings, Inc. (NYSE:BFH), with a market share price down 2%. The company provides proprietary direct-to-consumer credit cards and deposits along with digitally enabled private-label, co-branded credit cards, installment loans and buy now, pay later (“BNPL”). New management has completed a multi-year transformation to streamline its business model, enhance their underwriting process, develop differentiated products, and expand brand partnerships. An experienced and capable CFO joined couple years ago and has further enhanced the balance sheet and transformation plan. Since, the beginning of the transformation plan in early 2020, capital ratios have improved by more than 3x, debt reduced by $2B and increased direct to consumer deposits by more than $6B. Marketplace recent concerns on weaker industry credit card data appear over discounted in the current share price, as Bread management enhanced their underwriting over the past couple of years and increased their credit reserves to 13%. With company delinquency rates at half of reserve levels we see the potential for the company to see a significant reserve release over the next couple of years. Management looks well positioned to transition to their long-term financial targets, which would support normalized ROTCE in the Mid-20% and normalized earnings above $15 per share. BFH shares remain attractive in our view, trading at more than 25% normalized earnings yield.”
Bread Financial Holdings, Inc. (NYSE:BFH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 32 hedge fund portfolios held Bread Financial Holdings, Inc. (NYSE:BFH) at the end of the third quarter, compared to 30 in the previous quarter. In the third quarter of 2025, Bread Financial Holdings, Inc. (NYSE:BFH) reported revenue of $971 million. While we acknowledge the risk and potential of Bread Financial Holdings, Inc. (NYSE:BFH) 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 Bread Financial Holdings, Inc. (NYSE:BFH) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Bread Financial Holdings, Inc. (NYSE:BFH) and shared Turtle Creek Asset Management’s views on the company. In addition, please check out our hedge fund investor letters Q3 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.
