Housing, water, clothing: small-cap stocks in which the fund that outperformed the market invests

Barron's has named five stocks in which the Heartland Value fund, which specializes in investing in small-cap companies, invests. Its annualized return was 30.8% versus 25.4% for the comparable Russell 2000 Value index. Morningstar ranked Heartland Value among the top 4% of funds in its industry by this metric.

These are the stocks in the fund's portfolio that Barron's has taken a look at:

Heartland Value bought shares in Associated Banc-Corp, a bank holding company with $55 billion in assets, amid volatility in the financial sector that has been sparked by conflict in the Middle East, Barron's writes.

The stock has fallen more than 12% to $24.7 over the past month. The target price target set by Heartland Value is $36, implying a potential upside of nearly 46%.

In total, Associated Banc-Corp securities have eight "hold" ratings from Wall Street analysts and only three "buy" ratings. The average target is $30 per paper, which is 21% higher than their value at the close of trading on March 17.

Century Communities, which was founded in 2002 and builds affordable housing, is "a great long-term investment," according to Heartland Value co-manager Bill Nasgowitz. The company has a capitalization of $1.7 billion, which is about 66% of its book value, according to Nasgowitz. In addition, about 13% of the stock is owned by insiders, he notes. The purchase of securities by insiders can be regarded as a sign of confidence in the company's future. The co-manager of the fund also adds that the company has never suffered losses.

Three Wall Street analysts have rated shares of Century Communities with a "buy" rating and two have given a "sell" rating to the stock. The average target price is $73.75, implying a potential upside of 26% to the stock's closing price on March 17.

Choice Hotels International owns the Radisson, Comfort Inn and Quality Inn hotel brands, among others. Most of its hotels are in the U.S., so it could benefit from a reduction in overseas travel by Americans if the country's economic situation weakens, Nasgowitz says. He also points out that 45% of the company is owned by insiders.

Most Wall Street analysts are neutral on the company's prospects: its securities have eight "hold", five "sell" and four "buy" ratings. The average target price of $112 provides the potential for their growth of more than 13% to the last closing price.

Heartland Value acquired shares of Primo Brands, which owns the Pure Life and Primo Water drinking water brands, among others, in the fourth quarter of 2025, after having exited the company in 2024. The fund took advantage of the company's plummeting stock prices. They collapsed after the company decided to accelerate its integration with Blue Triton, the former Nestle unit it merged with in 2022. The move, made in 2025, led to serious logistical problems, a situation exacerbated by a tornado that damaged one of Primo Brands' plants. As a result, its stock lost all of the growth it had gained in the previous two years. This led to a change of management, and the new management managed to correct the situation. Since January 1, quotations have grown by almost a quarter.

Overall, Wall Street shares Heartland Value's optimism about Primo Brands' prospects: its stock has ten "buy" ratings from analysts and three "hold" ratings. The average target is $27, which is 31% more expensive than the current share price.

Columbia's revenue has plummeted since the coronavirus pandemic and has been hit by import duties. The stock has plunged 47% in the past five years, with a 40% drop since April 2025, when increased duties from the U.S. were first announced. That's what the Nasgowitz-managed fund has used to increase its stake in the company. He calls it stable, profitable, debt-free and cash-rich. Columbia also pays dividends.

Wall Street is cautious about Columbia's prospects: five analysts advise to hold its securities, three buy and two sell. The average target price is $64.5, suggesting a potential upside of almost 17% to the closing price on March 17.