L1 Capital International Strategy Trimmed HCA Healthcare (HCA) Due to Share Price Appreciation

Core Insights - L1 Capital International Fund's fourth-quarter 2025 investor letter emphasizes the importance of valuation analysis for AI-focused investments, indicating that mere conviction in AI is insufficient for successful outcomes [1] - The fund achieved a return of 2.2% for Q4 2025, underperforming the benchmark MSCI World Net Total Return Index, which returned 2.5% [1] - For the entire year of 2025, the fund returned 9.8% net of fees, compared to the benchmark's 12.4% [1] Company Highlights - HCA Healthcare, Inc. (NYSE:HCA) is a significant holding for L1 Capital, with a market capitalization of $109.38 billion [2] - HCA's stock closed at $478.84 per share on January 14, 2026, with a one-month return of 2.63% and a 52-week gain of 54.74% [2] - The fund increased its investment in HCA during a period of negative sentiment regarding healthcare policy, making it one of the largest holdings, but has since reduced its position as HCA became one of the smallest holdings [3] Market Sentiment and Future Outlook - The market's initial concerns regarding the impact of healthcare policy under President Trump on private hospitals have shifted, with expectations for operating conditions becoming more balanced [3] - Mizuho analysts see improving margins for HCA Healthcare supporting its performance into 2026, although the stock is not among the top 30 most popular stocks among hedge funds [4] - While HCA is recognized for its potential, some analysts suggest that certain AI stocks may offer greater upside potential with less downside risk [4]