Here's Black Bear Value Partners' Views on Flagstar Financial (FLG)

Black Bear Value Partners, an investment management firm, published its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Black Bear Value Fund returned -7.1% in September and -1.0% in the quarter, and -12.7% YTD. The S&P 500 returned +3.6% September, +8.1% in the quarter, and +14.8% year-to-date. HFRI Value Index returned +1.3% in September, +5.9% in the quarter, and +13.7% year-to-date. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Black Bear Value Fund highlighted stocks such as Flagstar Financial, Inc. (NYSE:FLG). Flagstar Financial, Inc. (NYSE:FLG) is the bank holding company for Flagstar Bank, N.A., which provides banking products and services. The one-month return of Flagstar Financial, Inc. (NYSE:FLG) was -5.23%, and its shares gained 8.73% of their value over the last 52 weeks. On October 8, 2025, Flagstar Financial, Inc. (NYSE:FLG) stock closed at $11.96 per share, with a market capitalization of $4.97 billion.

Black Bear Value Fund stated the following regarding Flagstar Financial, Inc. (NYSE:FLG) in its third quarter 2025 investor letter:

"Flagstar Financial, Inc. (NYSE:FLG) is the former New York Community Bank (a mashup of Flagstar Bank, New York Community Bank and assets from Signature Bank). Like our SHORT investments in Silicon Valley Bank and First Republic, FLG had a hole in their balance sheet (from soured multifamily and office real estate vs. long duration securities). That is where the similarities end.

FLG raised over $1BB in additional capital, led by former Treasury Secretary Steven Mnuchin. They revamped the management team and brought in a superstar CEO in Joseph Otting. They have reviewed nearly all the loans on the books, sold off non-core assets, raising additional capital and are focused on delivering a narrowly focused, well-capitalized boring regional bank. In this case boring is good. Importantly, they have taken a conservative view of their loan book and a large credit reserve. This contrasts with several bank/private credit lenders we are short who have taken minimal reserves..." (Click here to read the full text)

Flagstar Financial, Inc. (NYSE:FLG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 36 hedge fund portfolios held Flagstar Financial, Inc. (NYSE:FLG) at the end of the second quarter, the same as in the previous quarter. While we acknowledge the potential of FLAGSTAR FINANCIAL, INC. (NYSE:FLG) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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.