Should You Be Confident in Phinia Inc. (PHIN)

Heartland Advisors, an investment management company, released its “Heartland Value Plus Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The third quarter proved to be robust for small caps, signaling improved demand dynamics. The Russell 2000® Index was up 12.39% in the quarter, outperforming the S&P 500 Index, which rose 8.12%. The fund returned 8.51% in the third quarter compared to a 12.60% gain for the Russell 2000® Value Index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Heartland Value Plus Fund highlighted stocks such as PHINIA Inc. (NYSE:PHIN). PHINIA Inc. (NYSE:PHIN), a spin-off from BorgWarner (BWA), develops, designs, and manufactures integrated components and systems for commercial and light vehicles, and industrial applications to optimize performance, increase efficiency, and reduce emissions.  The one-month return of PHINIA Inc. (NYSE:PHIN) was -9.93%, and its shares gained 13.30% of their value over the last 52 weeks. On October 10, 2025, PHINIA Inc. (NYSE:PHIN) stock closed at $51.78 per share, with a market capitalization of $2.014 billion.

Heartland Value Plus Fund stated the following regarding PHINIA Inc. (NYSE:PHIN) in its third quarter 2025 investor letter:

"Our stock selection performs best when any optimism surrounding the improving fundamentals of companies we’re watching are confirmed by the actions of management. That can come in several forms, including active share buybacks (indicating management believes the stock is undervalued), insider buying (a sign that executive leaders believe the stock is a good value and willing to put their own money on the line), and growing dividends (a sign of management’s confidence in their future profits and cash flow). Currently, roughly one-third of our holdings in the Strategy have insider buying; 84% of our companies are in active buyback mode; and 61% have increased their dividends in the past year.

Another example is PHINIA Inc. (NYSE:PHIN), an auto parts company spun off from Borg Warner in 2023 that makes fuel systems for vehicle manufacturers and the after-market. In our opinion, the market has been overly pessimistic on PHIN’s outlook in the aftermath of President Trump’s ‘Liberation Day’ announcements on tariffs, and large insider purchases by the company’s CEO and two directors helped confirm our view.

We believe PHIN has a variety of ways to win, especially relative to other companies in the auto parts category. In its legacy auto OEM business, PHIN is the third player in a three-company oligopoly that collectively controls roughly 80%-90% market share. The second-biggest player in this group has deemphasized this category since COVID-19, resulting in 4%-5% market share gains for PHIN. We believe this trend is likely to continue, and PHIN could control around 20% of the market by 2030, up from the mid-teens today…” (Click here to read the full text)

PHINIA Inc. (NYSE:PHIN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 34 hedge fund portfolios held PHINIA Inc. (NYSE:PHIN) at the end of the second quarter, up from 33 in the previous quarter. While we acknowledge the potential of PHINIA Inc. (NYSE:PHIN) 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 another article, we covered PHINIA Inc. (NYSE:PHIN) and shared Voss Capital's views on the company in the previous quarter. 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.