The London Company, an investment management company, released its second-quarter 2026 investor letter for its "Small Cap Strategy." U.S. equities rebounded in the quarter, driven by AI infrastructure spending and positive earnings. The letter can be downloaded here. Despite this optimism, rate outlook uncertainty persisted.
Technology, previously weak, surged to lead the market, especially in semiconductors, while energy declined as oil prices fell. Small caps outperformed large caps, with momentum and volatility factors leading, although quality and yield were headwinds for portfolios. The London Company Small Cap portfolio increased 12.9% during the quarter, underperforming the Russell 2000 Index's 21.5% gain, primarily due to stock selection issues.
The firm remains confident in the durable, high-quality businesses for attractive long-term compounding. Please review the Fund's top five holdings to learn more about its key selections for 2026. In its second-quarter 2026 investor letter, London Company Small Cap Strategy highlighted Matson, Inc. (NYSE:MATX).
Matson, Inc. (NYSE:MATX) is an ocean transportation and logistics services company. On September 21, 2026, Matson, Inc. (NYSE:MATX) closed at $234.72 per share. Over the past month, Matson, Inc. (NYSE:MATX) returned 5.34%, but its shares are up 122.95% over the past year.
Matson, Inc. (NYSE:MATX) has a market capitalization of $7.02 billion, and its stock has traded within a 52-week range of $86.97 to $240.87. London Company Small Cap Strategy stated the following regarding Matson, Inc. (NYSE:MATX) in its Q2 2026 investor letter: "Reduced: Matson, Inc. (NYSE:MATX) - We trimmed MATX on recent strength to reduce its relative weight following meaningful appreciation within the portfolio. The Transpacific market remains stable, the U.S. consumer is holding up, and MATX continues to generate substantial cash and reduce its share count." Matson, Inc. (NYSE:MATX) is not on our list of the 40 Most Popular Stocks Among Hedge Funds.
According to our database, 24 hedge fund portfolios held Matson, Inc. (NYSE:MATX) at the end of the second quarter, down from 28 in the previous quarter. While we acknowledge the potential of Matson, Inc. (NYSE:MATX) 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.
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