Hidden Value Stocks Q3 2025: Heartland Advisors' Will Nasgovitz On His Favorite Stocks

2025-09-22 03:52:52

(MENAFN- ValueWalk) >Below is a brief excerpt from our Q3 2025 issue of Hidden Value Stocks, featuring an interview with Will Nasgovitz of Heartland Advisors. Read the full Hidden Value Stocks Q3 2025 Issue here and see previous Hidden Value Stocks Issues here.

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Introduction to Will Nasgovitz and Heartland Advisors, Inc.
What's changed at Heartland
Building the Heartland team
Advice and inspiration

Introduction to Will Nasgovitz and Heartland Advisors, Inc.

Will Nasgovitz has been at Heartland Advisors since 2003 and has co-managed the firm's Mid Cap Value (MUTF:HRMDX) strategy since 2015 and its Value Fund (MUTF:HRTVX) from 2009 to 2013 and again since 2019. He started at the firm as an analyst focusing on industrial stocks, gradually broadening his coverage over time to include materials and health care, although he remained a true generalist.

Nasgovitz became a portfolio manager a few years after joining Heartland and now serves as the firm's CEO. He actually grew up in the fund management business as his father, Bill Nasgovitz Heartland's founder, was a broker when Will was a kid. Bill also worked at Dean Witter in the 1960s.

Recalling time spent at the office with his father when he was a kid, Nasgovitz became acquainted with stock research at a young age. In fact, he found success with the first stock he bought when he was 12, which was Nike, a value stock at the time.

“I liked the product or really, Michael Jordan,” Nasgovitz said.“ I did not realize it was a value stock at the time.”

He decided to follow in his father's footsteps and go into fund management after becoming interested in economics and the connection to capital markets.

Heartland's 10 Principles of Value InvestingTM

Heartland Advisors is a 100% employee-owned value boutique management firm that focuses on U.S. stocks in the micro-to-mid-cap range. The firm launched its first mutual fund, the Heartland Value Fund, under the guidance of Bill Nasgovitz.

The firm has long utilized its proprietary 10 Principles of Value InvestingTM when picking stocks, which are based on Benjamin Graham's philosophy as presented in The Intelligent Investor.

The 10 Principles of Value InvestingTM are:

Low price to earnings

Low price to cash flow

Low price-to-book value

Company value

Financial soundness

Catalyst for recognition

Capable management and insider ownership

Sound business strategy

Positive earnings dynamics

Positive technical analysis What's changed at Heartland

As Heartland has evolved its 10 Principles of Value InvestingTM, it has also adjusted where it invests. According to Nasgovitz, they used to avoid utilities, consumer staples and real estate investment trusts because their valuations and leverage didn't line up with their 10 Principles of Value InvestingTM. However, not owning those sectors detracted from the firm's performance.

“Interestingly, the process of finding ideas in these sectors has proven to be very intellectually stimulating,” Nasgovitz added.

One of his favorite stocks in the Heartland portfolio is Alaska Air Group (NYSE:ALK), which is owned in HRTVX. The firm bought it in December 2023 after working on it for over a year. Nasgovitz said he loves the process and the results they've seen from owning the stock.

On the other hand, he reported that some unfavorable positioning weighed heavily on their portfolio a decade ago, when they were massively overweight certain areas of the market, drowning out their security selection.

Read the full Hidden Value Stocks Q3 2025 Issue here.

Building the Heartland team

When assembling the Heartland team, Nasgovitz looks for quality candidates - whether or not they have an opening at the time. Colin McWey joined the firm's Mid Cap Strategy from Bank of America in 2010, although they didn't have an opening then. Nasgovitz felt his experience on the credit funding side for health care and financials and strong work ethic would benefit Heartland's clients.

The firm also didn't have a posted opening when Troy McGlone, who interned at Heartland in 2014, graduated with his MBA. His experience working at Stark's funding desk along with his work ethic led Nasgovitz to extend an offer.

“Both Colin and Troy have been instrumental in growing HRMDX through impressive long-term results,” he added.

Heartland hired Mike Warecki and Jake Westphal in 2019 and 2020, respectively, for the Value Fund. Like Troy, Warecki interned while participating at UW-Madison's ASAP program, while Westphal was at UBS covering the leisure space.

“We knew we needed to add to our small cap research bench, and they both were cultural fits,” Nasgovitz explained.“Mike and Jake have been influential in turning around HRTVX over the last five years and have subsequently been named associate portfolio managers last month.”

Read the full Hidden Value Stocks Q3 2025 Issue here.

Advice and inspiration

Nasgovitz advises budding or new managers to be constantly looking for a bull market. He said there's always one somewhere - a lesson he learned the hard way during the Eurozone crisis in 2011. Nasgovitz began to worry about the viability of banks and turned bearish on the sector all that summer into the fall.

However, that turned out to be a poor decision because the market soared starting in October, leaving him flatfooted. Nasgovitz also advises managers to remember how little they know.

“It is important to question everything, to be skeptical, but you cannot let those uncertainties jade your thinking because there are generally ripe opportunities available to long-term investors that have likely factored in most of the unknowns we might be worried about,” he said. As far as his own inspiration, he said he's inspired by his wife.

“She's an amazing mom, sister, daughter and friend,” Nasgovitz said.“She's also an excellent radiologist and has a great sense of humor. I'm a lucky guy.”

Read the full Hidden Value Stocks Q3 2025 Issue here.

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