Heartland Advisors, an investment management company, released its “Heartland Value Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund was down 5.63% in the first quarter compared to a 7.74% fall for the Russell 2000 Value Index. The fund outperformed the benchmark over the past 1, 3, and 5 years. Stock selection accounted for almost all of the first-quarter outperformance, specifically strong in Energy, Financials, Technology, Real Estate, and Consumer Discretionary. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first quarter 2025 investor letter, Heartland Value Fund emphasized stocks such as PotlatchDeltic Corporation (NASDAQ:PCH). PotlatchDeltic Corporation (NASDAQ:PCH) is a Real Estate Investment Trust (REIT) that owns nearly 2.2 million acres of timberlands. The one-month return of PotlatchDeltic Corporation (NASDAQ:PCH) was -13.82%, and its shares lost 7.26% of their value over the last 52 weeks. On April 14, 2025, PotlatchDeltic Corporation (NASDAQ:PCH) stock closed at $39.34 per share with a market capitalization of $3.098 billion.

Heartland Value Fund stated the following regarding PotlatchDeltic Corporation (NASDAQ:PCH) in its Q1 2025 investor letter:

"While Columbus McKinnon is an example of a stock that was negatively impacted by policy uncertainty (at least temporarily), PotlatchDeltic Corporation (NASDAQ:PCH) is a company that could benefit from recent policy changes.

Potlatch, a timber REIT that focuses on harvesting sawlogs and producing wood products, has been in our portfolios for quite some time. When we first entered this position, it stood out as a domestic provider of homebuilding materials. That remains a highly relevant point, given the supply gap of housing in the United States and tariffs established by the Trump administration on Canadian timber products.

The new levies, on top of those already in place, brings the total tax on Canadian lumber to over 50%. As PCH is the only American wood products company that manufactures entirely in the U.S, it is likely to be a primary beneficiary of the rising cost of imported timber. Potlach’s harvest volume is mostly comprised of Southern Yellow Pine, which may not be a perfect substitute in terms of quality compared to trees historically imported from Canada but will likely be preferred by the market in terms of cost. We value PCH, which is currently trading at around $45 per share, with a target price of $54..." (Click here to read the full text)

Aerial view of a timberland with lush green trees and sunlight filtering through the branches.

PotlatchDeltic Corporation (NASDAQ:PCH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held PotlatchDeltic Corporation (NASDAQ:PCH) at the end of the fourth quarter which was 28 in the previous quarter. While we acknowledge the potential of PotlatchDeltic Corporation (NASDAQ:PCH) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We covered PotlatchDeltic Corporation (NASDAQ:PCH) in another article, where we shared the list of best land and timber stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.