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Black Bear Value Partners, an investment advisory firm, issued its first-quarter 2026 investor letter. A copy of the letter can be downloaded here. The Black Bear Value Fund gained 1.9% in March, bringing the year-to-date return to 13.2%. Meanwhile, the S&P 500 dropped -5.0% in March and has a YTD return of -4.4%. So far in 2026, both long and short investments in the Fund have been profitable. The portfolio includes companies with strong growth prospects and low risk of long-term capital loss. Long-term trends are expected to favor these businesses for years ahead. Although short positions are under scrutiny for their fundamentals, suggesting further declines. Issues such as chronic underinvestment and recent developments in Iran threaten the energy and commodity sectors. Concerns about the private credit market also remain. Overall, the portfolio outlined how long-term investment ideas can generate significant profits if successful. In addition, you can check the Fund’s top five holdings to determine its best picks for 2026.

In its first-quarter 2026 investor letter, Black Bear Value Fund highlighted stocks like Flagstar Bank, National Association (NYSE:FLG). Flagstar Bank, National Association (NYSE:FLG) is a US based company that provides banking products and services. On April 14, 2026, Flagstar Bank, National Association (NYSE:FLG) closed at $14.07 per share. One-month return of Flagstar Bank, National Association (NYSE:FLG) was 13.83%, and its shares gained 34.90% over the past 52 weeks. Flagstar Bank, National Association (NYSE:FLG) has a market capitalization of $5.85 billion.

Black Bear Value Fund stated the following regarding Flagstar Bank, National Association (NYSE:FLG) in its Q1 2026 investor letter:

"Flagstar Bank, National Association (NYSE:FLG) increased by ~5% in Q1. Flagstar Financial is the former New York Community Bank (a mashup of Flagstar Bank, New York Community Bank and assets from Signature Bank). Like our past SHORT investments in Silicon Valley Bank and First Republic, FLG had a hole in their balance sheet (from soured multifamily and office real estate vs. long-duration securities). That is where the similarities end.

FLG raised over $1BB in additional capital, led by former Treasury Secretary Steven Mnuchin. They revamped the management team and brought in a superstar CEO in Joseph Otting who successfully turned around OneWest Bank post GFC (formerly known as IndyMac Bank). Mr. Otting and his team are my kind of managers – they are plain-spoken, hardworking and plan for the worst while hoping for the best..." (Click here to read the full text)

Flagstar Bank, National Association (NYSE:FLG) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 34 hedge fund portfolios held Flagstar Bank, National Association (NYSE:FLG) at the end of the fourth quarter, compared to 36 in the previous quarter. While we acknowledge the potential of Flagstar Bank, National Association (NYSE:FLG) 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 Q1 2026 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.