An Uneasy Macro Environment Hurt Park Hotels & Resorts (PK) in Q4

Longleaf Partners, managed by Southeastern Asset Management, released its “Small-Cap Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. Longleaf experienced several environments throughout its experience in small-cap investing. This year, the underlying developments in the Fund’s holdings were more promising than the actual stock price returns when compared to the target of inflation plus 10% and the unusual performance of the Russell 2000. In Q4 2025, the Fund returned 1.13% compared to 2.40% for the Russell 3000 Index and 2.19% for the Russell 2000 Index. The Fund’s yearly return was 7.56% compared to 17.15% and 12.81% return for the indexes, respectively. In 2025, Southeastern demonstrated strong performance by protecting investments during market volatility, emphasizing the value of owning solid, free cash flow-generating companies over speculative fads. In addition, please check the Fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Longleaf Partners Small-Cap Fund highlighted stocks like Park Hotels & Resorts Inc. (NYSE:PK). Park Hotels & Resorts Inc. (NYSE:PK) is one of the leading lodging real estate investment trusts. On February 24, 2026, Park Hotels & Resorts Inc. (NYSE:PK) stock closed at $11.27 per share. One-month return of Park Hotels & Resorts Inc. (NYSE:PK) was 5.03%, and its shares lost 8.67% over the past 52 weeks. Park Hotels & Resorts Inc. (NYSE:PK) has a market capitalization of $2.253 billion.

Longleaf Partners Small-Cap Fund stated the following regarding Park Hotels & Resorts Inc. (NYSE:PK) in its fourth quarter 2025 investor letter:

"Park Hotels & Resorts – Hotel REIT Park Hotels & Resorts was a detractor for the year. The company sold off due to worries about how an uneasy macro environment will impact a leisure-focused hotel company. The iconic Hilton Hawaiian Village, Park’s most valuable property, is still recovering from both a labor strike in 2024 and reduced Japanese inbound travel as a result of the weaker yen. The company has continued down the path of selling non-core hotels and has thus far received attractive prices, while share repurchases have also occurred. We sold our position earlier in the year due to a combination of recycling capital into better ideas and never getting our position to a normal weight."

Park Hotels & Resorts Inc. (NYSE:PK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 29 hedge fund portfolios held Park Hotels & Resorts Inc. (NYSE:PK) at the end of the fourth quarter, up from 26 in the previous quarter. In Q4 2025, Park Hotels & Resorts Inc.'s (NYSE:PK) RevPAR was around $182, up nearly 1% year-over-year and nearly 3% excluding Royal Palm. While we acknowledge the potential of Park Hotels & Resorts Inc. (NYSE:PK) 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 Q4 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.