Fiduciary Management Inc. (FMI), an independent money management firm, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. US stock markets experienced a decline in Q1 due to changing trade policies and skepticism about AI, with the S&P 500 Index and Russell 2000 Index falling 4.27% and 9.48%, respectively. Consumer confidence fell to a 12-year low amid uncertainty. International stock markets performed better. Value equities are outperforming the growth stock so far in 2025, which is encouraging. All the FMI portfolios have an active share above 90%. The firm’s focus is to find the best opportunities, and it has successfully executed a disciplined, value-oriented process for over 45 years. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Fiduciary Management Inc. highlighted stocks such as FirstCash Holdings, Inc. (NASDAQ:FCFS). Headquartered in Fort Worth, Texas, FirstCash Holdings, Inc. (NASDAQ:FCFS) is a retail pawn store operator. The one-month return of FirstCash Holdings, Inc. (NASDAQ:FCFS) was 1.61%, and its shares lost 7.39% of their value over the last 52 weeks. On April 16, 2025, FirstCash Holdings, Inc. (NASDAQ:FCFS) stock closed at $120.06 per share with a market capitalization of $5.37 billion.
Fiduciary Management Inc. stated the following regarding FirstCash Holdings, Inc. (NASDAQ:FCFS) in its Q1 2025 investor letter:
“FirstCash Holdings, Inc. (NASDAQ:FCFS) is one of the largest pawn operators in the world with around 3,000 total stores. We like the pawn business because it’s a defensive, needs-based business. Pawn demand typically strengthens as economic activity declines, which is an attribute not shared by many businesses. Pawn loans are also small in size, have short maturities, and are fully collateralized at attractive loan-to-values, making them very low-risk loans. Many states have adopted regulations that make it difficult to open new pawn stores, which insulates incumbent players from new competition. This leads to attractive returns on invested capital for industry participants. FirstCash has been a consolidator within the fragmented pawn industry in both the U.S. and Mexico. We expect this to continue. Therefore, even though it’s been a favorable microeconomic environment for pawn operators, we believe the company should be able to generate strong growth over the mid-to-long term. The shares are trading at relatively undemanding mid-teens earnings multiple.”
