The London Company, an investment management company, released its fourth-quarter 2025 investor letter for its “The London Company Mid Cap Strategy”. A copy of the letter can be downloaded here. In Q4 2025, US equities posted the third consecutive quarter of higher returns, with the Russell 3000 Index rising 2.4%. The market highlighted how investors balanced the optimism on earnings growth and concerns regarding AI returns and cooling macroeconomic factors. In the quarter, the portfolio returned 3.2% (3.0% ...

Core Insights - Alcon reported $2.7 billion in revenue for Q4 2025, marking a year-over-year increase of 9.1% and an EPS of $0.78, up from $0.72 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate by 0.2%, while the EPS also missed the consensus estimate by 0.76% [1] Financial Performance Metrics - Total Surgical Equipment/Other net sales were $277 million, a 21% increase year-over-year, but slightly below the average estimate of $277.54 million [4] - Total Surgical Implantables net sales reached $474 million, reflecting a 4% year-over-year increase, but below the estimated $482.1 million [4] - Total Surgical net sales amounted to $1.55 billion, an 8.6% year-over-year increase, slightly under the average estimate of $1.56 billion [4] - Total Vision Care net sales were $1.16 billion, a 9.8% increase year-over-year, exceeding the average estimate of $1.15 billion [4] - Total Surgical Consumables net sales were $794 million, a 7.6% year-over-year increase, just below the average estimate of $796.13 million [4] - Total Vision Care Contact Lenses net sales were $683 million, a 7.1% increase year-over-year, slightly below the average estimate of $687.14 million [4] - Total Vision Care Ocular Health net sales reached $474 million, a 13.9% year-over-year increase, surpassing the average estimate of $462.7 million [4] - Other revenues were reported at $16 million, a significant decline of 36% year-over-year, and below the estimated $26.18 million [4] - Overall net sales matched the average estimate of $2.7 billion [4] Stock Performance - Alcon shares have returned +2.6% over the past month, outperforming the Zacks S&P 500 composite, which saw a -1% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Viewpoint - CooperCompanies will report its first quarter 2026 financial results on March 5, 2026, at 4:15 PM ET, followed by a conference call to discuss the results and corporate developments at 5:00 PM ET [1]. Company Overview - CooperCompanies is a leading global medical device company with two main business units: CooperVision, which focuses on the contact lens industry, and CooperSurgical, which specializes in fertility and women's healthcare [3]. - The company is headquartered in San Ramon, California, employs over 15,000 people, sells products in more than 130 countries, and positively impacts over 50 million lives annually [3].

Core Viewpoint - Diamond Hill Capital's "Large Cap Fund" investor letter for Q4 2025 highlights a cautious stance on AI-driven market enthusiasm while 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%, driven by AI optimism [1] - The Fund returned 1.41% in the quarter, underperforming the Russell 1000 Value Index [1] Group 2: The Cooper Companies, Inc. (NASDAQ:COO) - The Cooper Companies, Inc. was introduced as a new addition to the Diamond Hill Large Cap Fund, focusing on its operations in contact lenses and women's health [2][3] - The Cooper Companies' stock closed at $80.65 per share on December 30, 2025, with a market capitalization of $16.034 billion [2] - The company experienced a one-month return of -4.35% and a 52-week loss of 15.37% [2] Group 3: Investment Rationale - The Fund initiated a position in The Cooper Companies due to revenue growth deceleration and executional challenges impacting valuations, despite long-term growth potential in the contact lens industry [3] - The women's health and fertility segment faces cyclical headwinds but operates in a market with secular tailwinds, with expectations for long-term benefits from recent investments [3] Group 4: Hedge Fund Interest - The Cooper Companies is not among the 30 most popular stocks among hedge funds, with 56 hedge fund portfolios holding the stock at the end of Q3, up from 48 in the previous quarter [4] - While acknowledging the potential of The Cooper Companies, the Fund believes certain AI stocks present greater upside potential and less downside risk [4]

Core Viewpoint - Bausch + Lomb Corporation has successfully closed a credit agreement refinancing, entering into a fourth amendment to its existing credit agreement, which includes a new tranche of term B loans totaling $2,802,125,000 to refinance existing loans due in 2028 and 2031 [1] Group 1: Credit Agreement Details - The new Replacement Term Loans have an amortization rate of 1.00% per annum, with the first installment due on June 30, 2026 [2] - The applicable margin for the Replacement Term Loans is set at 3.75% per annum for loans tied to term SOFR and 2.75% per annum for those tied to the alternate base rate, reflecting a reduction of 0.50% and 0.25% respectively from previous loans [2] - The maturity date for the Replacement Term Loans is January 15, 2031, which aligns with the maturity date of the previously existing loans, effectively extending the maturity of the First Incremental Term Loans from September 29, 2028 [2] Group 2: Company Overview - Bausch + Lomb is a leading global eye health company focused on improving vision and quality of life for individuals worldwide, with a commitment to innovation in eye care [3] - The company has a diverse product portfolio that includes contact lenses, prescription products, over-the-counter options, and surgical devices, aimed at enhancing patient outcomes [3]

Market Performance - US stocks gained over 8% in the third quarter of 2025, as measured by the Russell 3000 Index, with small-cap stocks rising more than 12% [1] - Large-cap stocks increased by about 8%, while mid-cap stocks saw a gain of 5% [1] Diamond Hill Mid Cap Strategy Performance - The strategy underperformed the Russell Midcap Index in Q3 2025, returning 4.49% net compared to 5.33% for the Index [1] The Cooper Companies, Inc. Overview - The Cooper Companies, Inc. (NASDAQ:COO) manufactures and markets contact lenses through its CooperVision and CooperSurgical segments [2] - The one-month return for The Cooper Companies, Inc. was 8.74%, but its shares lost 10.29% of their value over the last 52 weeks [2] - As of December 30, 2025, the stock closed at $82.47 per share, with a market capitalization of $16.396 billion [2] Investment Insights - The Diamond Hill Mid Cap Strategy initiated several new positions in Q3 2025, including The Cooper Companies, Inc. [3] - Despite the overall market rise, the company is viewed as undervalued relative to its long-term growth outlook [3] - The Cooper Companies, Inc. had consolidated revenues up 4.6% year over year to a quarterly record of $1.065 billion in Q4 2025 [4] - The number of hedge fund portfolios holding The Cooper Companies, Inc. increased from 48 to 56 in the third quarter [4]

Core Viewpoint - CooperCompanies has appointed Walter (Walt) M Rosebrough, Jr. as an independent director and entered into a cooperation agreement with Browning West, aiming to enhance governance and drive long-term value for shareholders [1][3]. Group 1: Appointment and Governance - Walter Rosebrough will join the Board's Corporate Governance & Nominating Committee and is being considered for the Chair position by the end of 2026 [1]. - The Board will also appoint a new independent director with medical technology experience, in agreement with Browning West [1]. Group 2: Background of Walter Rosebrough - Rosebrough served as CEO of STERIS from 2007 to 2021, achieving a 10-fold total return on stock and an 18% annualized return, compared to a 10% annualized return for the S&P 500 [2]. - His career includes nearly two decades at Hill-Rom Holdings, where he held senior executive roles [2]. Group 3: Strategic Vision and Cooperation - Colleen Jay, the Incoming Chair of the Board, emphasized Rosebrough's leadership experience and track record in supporting sustainable growth [3]. - Browning West expressed confidence in Cooper's long-term potential and the constructive path forward with the Board [3]. - Browning West has agreed to customary standstill and voting commitments and will support the Board's full slate of directors at the 2026 Annual Meeting [3]. Group 4: Company Overview - CooperCompanies is a global medical device company with two business units: CooperVision and CooperSurgical, impacting over fifty million lives annually [4]. - The company is headquartered in San Ramon, CA, employs over 15,000 people, and sells products in over 130 countries [4]. Group 5: About Browning West - Browning West is an independent investment partnership focused on long-term value creation in high-quality businesses, primarily in North America and Western Europe [5]. - Founded in 2019, it is backed by leading foundations, family offices, and university endowments [5].

Company Overview - The Cooper Companies is a global medical device company with two main segments: CooperVision (CVI) and CooperSurgical (CSI) [11] - CVI focuses on contact lenses, particularly in daily silicone hydrogel lenses, torics, multifocals, and myopia management, with flagship products like MyDay and MiSight [11] - CSI provides products and services in fertility and women's health, including in-vitro fertilization (IVF) solutions and contraceptives [11] Investment Ratings - COO is currently rated 3 (Hold) on the Zacks Rank, with a VGM Score of B [12] - The Value Style Score is also B, supported by a forward P/E ratio of 18.54, indicating attractive valuation metrics for value investors [12] - The Zacks Consensus Estimate for fiscal 2026 has increased to $4.39 per share, with one analyst revising their earnings estimate upwards in the last 60 days [12] Performance Metrics - COO has an average earnings surprise of +2.4%, suggesting a positive trend in earnings performance [12] - With a solid Zacks Rank and strong Value and VGM Style Scores, COO is recommended for investors' consideration [13]

Core Viewpoint - Cooper Companies reported better-than-expected fourth-quarter earnings and provided optimistic financial guidance, leading to a rise in stock price [1][7] Financial Performance - The company reported fourth-quarter adjusted earnings of $1.15 per share, an 11% increase year over year, surpassing the consensus estimate of $1.11 [2] - Total sales for the quarter were $1.065 billion, nearly matching the consensus of $1.061 billion, reflecting a 5% year-over-year increase and 3% organic growth [2] - The CooperVision segment generated sales of $709.6 million, a 5% increase from the previous year's fourth quarter, with 3% growth in constant currency and organically [3] - CooperSurgical reported revenue of $355.6 million, up 4% year over year, with consistent growth in constant currency and organically [3] Future Outlook - For the first quarter of 2026, the company expects sales between $1.019 billion and $1.030 billion, compared to the consensus of $1.025 billion, with adjusted earnings projected at $1.02 to $1.04 per share against a consensus of $1.00 [4] - The company anticipates organic growth of 3% to 4% for 2026 and adjusted earnings for fiscal 2026 to be between $4.45 and $4.60 per share, exceeding the consensus of $4.09 [4] - Projected sales for fiscal 2026 are estimated to be between $4.299 billion and $4.338 billion, compared to the consensus of $4.089 billion [4] - Free cash flow for fiscal 2026 is expected to be between $575 million and $625 million, with projections of over $2.2 billion in free cash flow from fiscal 2026 to fiscal 2028 [5] Analyst Reactions - Needham maintains a Buy rating and raises the price target from $94 to $100 [6] - Mizuho keeps an Outperform rating and increases the price target from $85 to $100 [6] - Baird maintains an Outperform rating and raises the price target from $85 to $98 [6] - JP Morgan retains a Neutral rating and raises the price target from $66 to $78 [6] - Wells Fargo maintains an Equal-Weight rating and increases the price target from $72 to $82 [6]

Core Points - CooperCompanies has appointed Colleen Jay as the new Chair of the Board, effective January 2, 2026, succeeding Robert Weiss, who will remain on the Board for reelection [1][2] - The company is undergoing a formal strategic review to identify opportunities for enhancing long-term shareholder value [1][4] Leadership Changes - Colleen Jay has been on the Board since 2016 and has a strong background in global operational leadership, having retired from Procter & Gamble in 2017 after 32 years [2] - Robert Weiss has been a significant figure in CooperCompanies' success for nearly five decades, serving in various leadership roles including CEO from 2007 to 2018 [3] Strategic Review - The strategic review aims to improve performance in core markets, expand market share, enhance operational efficiency, and generate strong returns through disciplined capital deployment [4] - The company plans to focus on share repurchases under a $2 billion share repurchase program during this review period [4] Company Overview - CooperCompanies operates in the medical device sector with two main business units: CooperVision, a leader in the contact lens industry, and CooperSurgical, focused on fertility and women's healthcare [5] - The company has a workforce of over 15,000 and sells products in more than 130 countries, positively impacting over 50 million lives annually [5]