Long Leaf Partners' Fund Increased Its Stake in Albertsons (ACI) on Weakness

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 Albertsons Companies, Inc. (NYSE:ACI). Albertsons Companies, Inc. (NYSE:ACI) is a US-based supermarket operator. The one-month return of Albertsons Companies, Inc. (NYSE:ACI) was 7.72%, and its shares gained 2.74% of their value over the last 52 weeks. On October 23, 2025, Albertsons Companies, Inc. (NYSE:ACI) stock closed at $19.06 per share, with a market capitalization of $10.385 billion.

Longleaf Partners Fund stated the following regarding Albertsons Companies, Inc. (NYSE:ACI) in its third quarter 2025 investor letter:

Albertsons Companies, Inc. (NYSE:ACI) - We wrote about supermarket operator Albertsons earlier this year as a contributor in tougher stock market times. We took some off the table then but added back to our position in the third quarter on weakness. The stock was down on a quarterly earnings report that did not excite the market but was within our expectations. We were further pleased to see meaningful share repurchase at a high single digit annualized pace of shares outstanding. Later in the quarter, Albertsons’ industry was pressured by news of Amazon’s increased efforts in groceries. While we will never dismiss Amazon, we would also point out that this latest push is more of an incremental, expected move than something like the surprising acquisition of Whole Foods. This remains a competitive industry, but it is also a steadily necessary one in which Albertsons has a strong position thanks to its great real estate, brand recognition and owner alignment. Our confidence was bolstered further after quarter end when the company reported another solid set of results and announced a sizeable accelerated share repurchase, further growing value per share.

Albertsons Companies, Inc. (NYSE:ACI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 49 hedge fund portfolios held Albertsons Companies, Inc. (NYSE:ACI) at the end of the second quarter, compared to 52 in the previous quarter.  While we acknowledge the potential of Albertsons Companies, Inc. (NYSE:ACI) 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 Albertsons Companies, Inc. (NYSE:ACI) and shared the list of best large cap stocks to buy under $20. 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.