Longleaf Partners Adds to Fortune Brands Stake After Supply Chain Fixes

Longleaf Partners, managed by Southeastern Asset Management, disclosed in its third-quarter 2026 investor letter that it increased its position in Fortune Brands Innovations, Inc. (NYSE: FBIN) after the building products company cut annual earnings guidance. The fund attributed the stock's decline in the third quarter to a retrace of second-quarter gains that had followed the appointment of Jesse Singh as CEO. Singh reduced guidance in August due to external pressure from rising interest rates on housing-related companies and internal supply chain inefficiencies.

To address these internal issues, Singh temporarily utilized costly airfreight to ensure customers maintained proper inventory until the supply chain inefficiencies were resolved. The CEO also decided to reinvest some of Fortune Brands' tariff refunds into product development spending. Longleaf Partners characterized both decisions as proper long-term business moves. Although the fund had trimmed its position during the second-quarter stock price strength, it added back to the stake later in the third quarter.

Fortune Brands Innovations, headquartered in Deerfield, Illinois, provides home, security, and outdoor products for repair, remodeling, new construction, and security applications. The company closed at $40.79 per share on October 20, 2026. Over the past month, the stock returned 4.51%, while shares are down 19.67% in the last 52 weeks. The company has a market capitalization of $4.86 billion, with a 52-week trading range of $32.34 to $64.84.

In the same letter, Longleaf Partners noted that its Partners Fund returned 2.41% in Q3 and -3.15% year-to-date, compared to 2.30% and 12.75% for the S&P 500, respectively. The fund's three-year annualized returns stood at 11.7% entering the year. The firm stated that while macro factors like higher interest rates impact the market, financially strong investments are expected to endure. It observed that earnings multiples within its portfolios have decreased, presenting opportunities despite current frustrations with stock performance disconnects.

According to database records, 48 hedge fund portfolios held Fortune Brands Innovations at the end of the second quarter, an increase from 43 in the previous quarter. The company is not listed among the 40 most popular stocks among hedge funds. Longleaf Partners acknowledged the potential of Fortune Brands as an investment but stated it believes certain AI stocks offer greater upside potential and carry less downside risk.