Black Bear Value Partners' commentary for the month ended July 31, 2025.
Dear Partners and Friends,
- Black Bear Value Fund returned +0.1%, net, in July and -11.7% YTD.
- The HFRI Value Index returned +1.0% in July and +8.5% YTD.
- The S&P 500 returned +2.2% in July and +8.6% YTD.
Please note returns could vary depending on your time of investment.
As mentioned in our previous update we are entering the begining of a catalyst-heavy period for many of the businesses in our portfolio. 2 examples that have occured since month end:
- Tidewater (NYSE:TDW) - a relatively new addition to the portfolio that we've been watching for 2+ years. Had historically been limited in capital allocation flexability due to debt covenants. The debt was refinanced this month allowing the Company a wide range of options for it's abundant free-cash-flow. Management announced a $500MM buyback authorization (for a 2.5-3bb Company) and the stock has revalued up ~17% since the announcement. We still view the business as exceptionally cheap and misunderstood.
- Warrior Met Coal (NYSE:HCC) - annouced their new Blue Creek development was ahead of schedule which will reduce the cash outflow and begin producing large amounts of cash earlier in 2026. Warrior is up over 15% since the news. Similar to TDW we view this business as cheap and misunderstood.
The portfolio has a number of businesses like the examples above and think these next 24 months will see narratives change.
Thank you for your trust and support,
Adam
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