Investor Concerns Impacted Labcorp (LH) in Q4

Core Viewpoint - Diamond Hill Capital's "Large Cap Fund" investor letter for Q4 2025 indicates a cautious stance on AI-driven market enthusiasm, emphasizing the attractiveness of fundamentally stable, high-quality, cash-generative businesses [1] Group 1: Market Performance - The Russell 1000 Value Index increased by 3.8% in Q4 2025, with the information technology sector rising by 11% and communication services by 9%, primarily driven by AI optimism [1] - The Fund returned 1.41% in Q4, underperforming the Russell 1000 Value Index [1] Group 2: Labcorp Holdings Inc. (NYSE:LH) Performance - Labcorp Holdings Inc. was highlighted as a leading performance detractor, with a one-month return of 3.80% and a 52-week gain of 9.58% [2] - As of February 2, 2026, Labcorp's stock closed at $270.29, with a market capitalization of $22.461 billion [2] Group 3: Company Insights - Concerns regarding Labcorp's lower-than-expected guidance were noted, attributed to delays in acquisition closings and weaknesses in its development pipeline, leading to a restructuring [3] - Despite these challenges, the company maintains competitive advantages in the diagnostic space, benefiting from scale and better-than-average margins [3] Group 4: Hedge Fund Interest - Labcorp is not among the 30 most popular stocks among hedge funds, with 47 hedge fund portfolios holding its shares at the end of Q3, an increase from 42 in the previous quarter [4] - The company is viewed as having potential, but certain AI stocks are considered to offer greater upside potential with less downside risk [4]