Subscription Pivot and SCBA Replacement Cycle Set to Drive MSA Safety’s (MSA) Margin Expansion

Heartland Advisors , an investment management company, released its second-quarter 2026 investor letter for "Heartland Opportunistic Value Equity Strategy". The letter can be downloaded here . Second-quarter indices signaled a broadening market, but strong performance was mainly focused on a limited range of technology infrastructure and semiconductor stocks. The strategy returned 12.32% in the quarter, underperforming the Russell 3000 Value Index's 14.02% gain. While security selection was positive in nine out of eleven sectors, led by Communications, Materials, and Industrials, negative selection within the Technology sector offset these benefits. In this volatile market, the firm focuses on businesses with significant upside potential and downside protection, rather than predicting the duration of AI infrastructure developments. Please review the Fund's top five holdings to learn more about its key selections for 2026.

In its second-quarter 2026 investor letter, Heartland Opportunistic Value Equity Strategy highlighted MSA Safety Incorporated (NYSE: MSA ), a leading manufacturer of workplace safety equipment. On September 21, 2026, MSA Safety Incorporated (NYSE:MSA) closed at $177.25 per share. Over the past month, MSA Safety Incorporated (NYSE:MSA) declined 5.56%, but its shares are up 3.00% over the past year. MSA Safety Incorporated (NYSE:MSA) has a market capitalization of $6.83 billion, and its stock has traded within a 52-week range of $151.11 to $208.92.

Heartland Opportunistic Value Equity Strategy stated the following regarding MSA Safety Incorporated (NYSE:MSA) in its Q2 2026 investor letter:

"A new portfolio addition last quarter was MSA Safety Incorporated (NYSE:MSA), which designs and manufactures firefighting equipment, gas detectors, and industrial safety equipment. MSA's fundamentals have been choppy in recent years against a backdrop that has favored AI infrastructure exposure over more mature industrial equipment makers. Last year, MSA's Fire Service segment sales were negatively impacted by the timing of Federal Assistance to Firefighters Grants (AFG) and the government shutdown that took place in the fourth quarter of 2025.

Management has been slow to raise prices in a volatile inflationary backdrop as it prefers to push permanent pricing actions through the company's distribution channel. As a result, 2025 sales rose less than 4% while operating profit margin fell 0.8%. However, we expect MSA's profit margin to expand in the coming years driven by its two highest-margin products: portable gas detectors and firefighter self-contained breathing apparatus (SCBA)..." ( Click here to read the full text )

MSA Safety Incorporated (NYSE:MSA) is not on our list of the 40 Most Popular Stocks Among Hedge Funds . According to our database, 34 hedge fund portfolios held MSA Safety Incorporated (NYSE:MSA) at the end of the second quarter, compared to 32 in the previous quarter. While we acknowledge the potential of MSA Safety Incorporated (NYSE:MSA) 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 Q2 2026 page for more investor letters from hedge funds and other leading investors.

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