Long Leaf Partners Fund's Updates on PotlatchDeltic (PCH)

Longleaf Partners, managed by Southeastern Asset Management, released its “Partners Fund” third-quarter 2025 investor letter. The letter can be downloaded here. The fund returned -0.33% in the third quarter, compared to the S&P 500’s 8.12 % return and the Russell 1000 Value’s 5.33% return. The firm is not happy with the flat performance of the portfolio, emphasizing its investments in real assets and brands that generate growing free cash flow (FCF) per share. Despite facing market pressures from speculation and government uncertainty, it anticipates that the Fund's ~10x FCF multiple could rise to the mid-teens as management implements strategies to improve margins and increase share repurchases. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its third-quarter 2025 investor letter, Longleaf Partners Fund highlighted stocks such as PotlatchDeltic Corporation (NASDAQ:PCH). PotlatchDeltic Corporation (NASDAQ:PCH) is a Real Estate Investment Trust (REIT) that owns nearly 2.1 million acres of timberlands. The one-month return of PotlatchDeltic Corporation (NASDAQ:PCH) was 5.57%, and its shares gained 0.50% of their value over the last 52 weeks. On October 23, 2025, PotlatchDeltic Corporation (NASDAQ:PCH) stock closed at $42.33 per share, with a market capitalization of $3.27billion.

"Rayonier and PotlatchDeltic Corporation (NASDAQ:PCH): These two complementary investments are newer holdings for the Fund, but we have owned both high-quality timberland companies before. Both companies were trading at large discounts when we were buying and had multiple ways to win. We were excited to see them announce a merger of equals after quarter end. This is a rare example of win/win M&A with real synergies that grow the value per share of the pro forma company. We applaud both companies for taking action to be even more on offense going forward.

We initiated positions in both Rayonier and PotlatchDeltic in the quarter. Rayonier was an immediate contributor. We discuss it more above in combination with PotlatchDeltic, as the two companies announced an accretive merger after quarter end. Southeastern has a strong long-term history investing in timberland assets, including these two companies multiple times before. This has been a tough year for housing-related stocks, and these companies have been no exception. That said, both have been on offense with accretive share repurchase and asset sales to capture the wide gap between private and public market valuations. Now they are taking the next step to be on offense by joining forces. We expect the combined company to be our largest position, which is exciting given its combination of Business, People and Price."

PotlatchDeltic Corporation (NASDAQ:PCH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 26 hedge fund portfolios held PotlatchDeltic Corporation (NASDAQ:PCH) at the end of the second quarter, the same as in the previous quarter. While we acknowledge the potential of PotlatchDeltic Corporation (NASDAQ:PCH) 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 PotlatchDeltic Corporation (NASDAQ:PCH) and shared Longleaf Partners Small-Cap Fund'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.