Here’s Why Aristotle Capital Value Equity Strategy Decided to Sell Commerce Bancshares (CBSH)

Core Insights - U.S. equity markets reached new all-time highs in Q4 2025, with the S&P 500 Index increasing by 2.66% and the Bloomberg U.S. Aggregate Bond Index rising by 1.10% [1] - Value stocks outperformed growth stocks during this period, reflecting a resilient U.S. economy [1] - The theme of artificial intelligence was prominent, with over 300 S&P 500 companies mentioning "AI" in earnings calls, positively impacting mega-cap tech stocks [1] - Concerns were raised regarding AI revenue circularity, capital spending, and long-term investment returns [1] - The Composite returned 1.45% pure gross of fees (0.95% net of fees), underperforming the Russell 1000 Value Index's 3.8% gain and the S&P 500 Index's 2.66% gain [1] Company-Specific Insights - Commerce Bancshares, Inc. (NASDAQ:CBSH) was highlighted in the fourth-quarter 2025 investor letter, with the stock closing at $53.59 per share on February 3, 2026 [2] - The stock of Commerce Bancshares, Inc. delivered a -0.24% return in the past month and is down 17.69% over the past twelve months, with a market capitalization of $7.897 billion [2] - The investment strategy initially favored Commerce Bancshares, Inc. due to its conservatively run franchise, disciplined credit approach, diversified revenue mix, and experienced management team [3] - Catalysts for investment included loan growth in core Kansas markets, prudent expense management, strong credit underwriting, and effective capital deployment through dividends and share repurchases [3] - The decision to sell the position in Commerce Bancshares, Inc. was made after the company executed consistently against its objectives, with proceeds redeployed into Wells Fargo, viewed as a more attractive investment opportunity [3]