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 Harley-Davidson, Inc. (NYSE:HOG). Harley-Davidson, Inc. (NYSE:HOG) is a leading motorcycle manufacturer that operates through Harley-Davidson Motor Company, LiveWire, and Harley-Davidson Financial Services segments. On June 18, 2026, Harley-Davidson, Inc. (NYSE:HOG) closed at $25.67 per share. One-month return of Harley-Davidson, Inc. (NYSE:HOG) was 8.18%, and its shares gained 9.79% over the past 52 weeks. Harley-Davidson, Inc. (NYSE:HOG) has a market capitalization of $2.70 billion.
Third Avenue Value Fund stated the following regarding Harley-Davidson, Inc. (NYSE:HOG) in its Q1 2026 investor letter:
“During the quarter ending March 31, 2026, the Fund initiated new positions in OSAKA Titanium Technologies Co., Ltd, Harley-Davidson, Inc. (NYSE:HOG) and Robert Half Inc.
Harley-Davidson manufactures motorcycles and accessories, sells financial services and earns brand licensing revenue. While its brand remains iconic, its core motorcycle market in the U.S., and the heavyweight bikes in which Harley-Davidson specializes, have suffered several years of sales declines. Some recent declines are attributable to the aftermath of the demand pull-forward that occurred during COVID, though demand for new heavyweight bikes has been stagnant-to declining for years. For Harley-Davidson specifically, the last several years have also been marked by multiple activist campaigns, board turnover, management changes and a string of strategic missteps.
One central strategic misstep, which represented a priority for previous management, included a virtual exit from lower priced entry-level bikes in favor of more expensive and higher profit margin bikes. While conceptually appealing, that strategy ignored the need to attract new entry-level customers and that entry-level bike purchases also lead to incremental demand for high margin customizations, branded accessories and financial service contract originations. Possibly most important, however, was a lack of recognition that stuffing dealerships with far more big expensive bikes than are in demand is bad for dealer economics, creates dealer frustration and discontent and ultimately results in significant price discounting to clear stale excess inventory. Our sense is that elements of the strategy changes being implemented by new management create the opportunity for far better operating performance from the core motorcycle business and it is evident that significant progress has already been made in clearing older inventory from dealership floors…” (Click here to read the full text)
Harley-Davidson, Inc. (NYSE:HOG) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 35 hedge fund portfolios held Harley-Davidson, Inc. (NYSE:HOG) at the end of the first quarter, compared to 37 in the previous quarter. While we acknowledge the risk and potential of Harley-Davidson, Inc. (NYSE:HOG) 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 HARLEY-DAVIDSON, INC. (NYSE:HOG) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Harley-Davidson, Inc. (NYSE:HOG) and shared a bullish thesis on the company. 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.
