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]

Core Insights - Longleaf Partners Small-Cap Fund reported a return of 2.03% in Q3 2025, underperforming compared to the Russell 3000's 8.18% and the Russell 2000's 12.39% [1] - Oscar Health, Inc. (NYSE:OSCR) experienced a one-month return of -2.97% and a 52-week decline of 7.45%, closing at $16.65 per share with a market capitalization of $4.794 billion on December 1, 2025 [2][3] Fund Performance - The Longleaf Partners Small-Cap Fund's performance in Q3 2025 was significantly lower than major indices, indicating challenges in stock selection or market conditions [1] Oscar Health, Inc. Analysis - Oscar Health transitioned from being a contributor to a detractor in the fund's performance, with claims losses in the healthcare sector being worse than expected [3] - The fund sold its remaining position in Oscar Health as the price-to-value gap closed, marking the investment as successful despite the volatility [3] - Oscar Health reported approximately $3 billion in revenue for Q3 2025, reflecting a 23% year-over-year increase [4] Hedge Fund Interest - Oscar Health was held by 40 hedge fund portfolios at the end of Q3 2025, a decrease from 43 in the previous quarter, indicating a decline in popularity among hedge funds [4] Investment Outlook - While Oscar Health shows potential, the fund suggests that certain AI stocks may offer better upside potential with less downside risk [4]