A.O. Smith (AOS) is Poised to Benefit from Upcoming Energy Regulations

Core Insights - Madison Mid Cap Fund's fourth-quarter 2025 performance showed a decrease of 1.2%, underperforming the Russell Midcap Index, which increased by 0.2% [1] - The Russell Midcap Index achieved a full-year return of 10.6%, marking an annual increase of over 14% [1] - The market in 2025 favored more volatile and speculative companies, presenting challenges for the Fund's focus on high-quality, profitable businesses [1] Company Insights - A. O. Smith Corporation (NYSE:AOS) was added to the Madison Mid Cap Fund's portfolio, recognized as a leading manufacturer of water heaters, boilers, and water treatment products [2][3] - The stock of A. O. Smith Corporation closed at $69.82 per share on March 10, 2026, with a one-month return of -12.96% and a 52-week gain of 6.37% [2] - A. O. Smith has a market capitalization of $9.655 billion [2] - The company benefits from a consistent demand profile, with 80-85% of water heater demand coming from replacement units [3] - A. O. Smith is positioned to capitalize on upcoming energy regulations and improved capital deployment under new CEO Steve Shafer [3] Market Position - A. O. Smith Corporation is not among the 40 most popular stocks among hedge funds heading into 2026, with 34 hedge fund portfolios holding the stock at the end of Q4 2025, down from 46 in the previous quarter [4] - Despite its potential, certain AI stocks are viewed as offering greater upside potential and less downside risk compared to A. O. Smith [4]