Here’s Why Diamond Hill Large Cap Fund Added Solventum (SOLV) to Its Portfolio

Core Insights - Diamond Hill Capital's "Large Cap Fund" reported a 1.41% return in Q4 2025, underperforming the Russell 1000 Value Index, which increased by 3.8% [1] - The information technology and communication services sectors led the market rally, driven by optimism surrounding AI [1] - The firm remains cautious about AI-driven market enthusiasm, favoring fundamentally stable, high-quality, cash-generative businesses [1] Company Insights - Solventum Corporation (NYSE:SOLV) was highlighted as a new addition to the Diamond Hill Large Cap Fund [2] - Solventum operates in healthcare through segments including Medsurg, Dental Solutions, and Health Information Systems, with a market capitalization of $13.34 billion as of February 2, 2026 [2] - The stock experienced a one-month return of -7.52% and a 52-week gain of 3.08% [2] Growth Potential - Solventum Corporation was spun off from 3M in April 2024, and the new management is focused on improving revenue growth and optimizing research and development [3] - The company is expected to show improved growth and margins as a standalone entity, addressing previous challenges of underinvestment and market share losses [3] Investment Sentiment - Solventum Corporation is not among the 30 most popular stocks among hedge funds, with 42 hedge fund portfolios holding the stock at the end of Q3 2025, up from 37 in the previous quarter [4] - While acknowledging Solventum's potential, the firm believes certain AI stocks present greater upside potential and lower downside risk [4]