Heartland Advisors, an investment management company, released its “Heartland Value Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Russell 2000® Value Index generated a return of 3.26% in the fourth quarter, outperforming 2.66% gains for the S&P 500. After the year-end surge, small stocks nearly caught up to large caps in 2025, their greatest performance since the pandemic. Due to an increase in the small-cap stock’s earnings, the investors are acknowledging their compelling valuations. The fund gained 2.61% in the quarter, compared to a 3.26% return for the Russell 2000® Value Index. The underperformance in the quarter was attributed to stock selection, mainly in the healthcare sector. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its fourth-quarter 2025 investor letter, Heartland Value Fund highlighted stocks such as Columbus McKinnon Corporation (NASDAQ:CMCO). Columbus McKinnon Corporation (NASDAQ:CMCO) is a heavy construction machinery manufacturer. On January 12, 2026, Columbus McKinnon Corporation (NASDAQ:CMCO) stock closed at $19.68 per share. One-month return of Columbus McKinnon Corporation (NASDAQ:CMCO) was 11.88%, and its shares lost 44.50% of their value over the last 52 weeks. Columbus McKinnon Corporation (NASDAQ:CMCO) has a market capitalization of $565.372 million.
Heartland Value Fund stated the following regarding Columbus McKinnon Corporation (NASDAQ:CMCO) in its fourth quarter 2025 investor letter:
“Another position we increased was Columbus McKinnon Corporation (NASDAQ:CMCO), which designs, manufactures, and distributes materials, handling products, and systems used in a variety of industrial applications, including lifting, automation, and precision conveyance. Early this year, CMCO reported slower-than-expected Q3 results, citing slowing industry demand driven by U.S. policy uncertainty. By itself, that would have likely triggered a mid-single digit to high-single-digit selloff based on historic price reactions. However, management also announced a $2.7 billion acquisition of a competitor, Kito Crosby, which sent the stock plummeting more than 40% due to concerns surrounding execution and an increased leverage profile upon closing.
At current prices, we believe Columbus has a compelling risk/reward profile as management seeks to reduce leverage and improve the growth and margin profile of the consolidated business. Management is targeting mid 20% EBITDA margins upon integration, up from 15.5% in FY25 pre-acquisition.
In our opinion, CMCO can rerate closer to its industrial peers that trade at an average of 12x EV/EBITDA. Meanwhile, our view of the stock’s attractive valuations seems to be validated by aggressive insider buying by management in the aftermath of the Q3 selloff.”
Columbus McKinnon Corporation (NASDAQ:CMCO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 24 hedge fund portfolios held Columbus McKinnon Corporation (NASDAQ:CMCO) at the end of the third quarter, compared to 28 in the previous quarter. While we acknowledge the risk and potential of Columbus McKinnon Corporation (NASDAQ:CMCO) 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 Columbus McKinnon Corporation (NASDAQ:CMCO) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Columbus McKinnon Corporation (NASDAQ:CMCO) and shared Aristotle Capital Small/Mid Cap Equity Strategy’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q4 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.
