Longleaf Small-Cap Fund's P/V ratio sits in the mid-50% range with 12% cash. Managers see wider value gaps as market winners overshoot fair value.
Alpha Score of 40 reflects weak overall profile with moderate momentum, poor value, moderate quality, moderate sentiment.
Longleaf Small-Cap Fund's portfolio valuations widened further in the second quarter, with the price-to-value ratio settling in the mid-50% range, the fund said in its quarterly commentary. Cash stood at 11.7% of assets, up from the prior quarter, while the number of holdings remained at 16.
The fund's managers said their investments are now more attractive on both price-to-value and price-to-free-cash-flow metrics, even as market winners have pushed higher beyond what they consider fair value. The commentary did not name specific positions that triggered the valuation gap.
The 16-stock portfolio and elevated cash position suggest the team is waiting for better entry points rather than chasing the rally. The fund's concentration in small-cap names leaves it exposed to any rotation out of the mega-cap growth stocks that have dominated the broader market this year.
Longleaf Small-Cap Fund is part of the Southeastern Asset Management family. The fund's next quarterly update is expected in October.
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