Core Insights - L1 Capital International Fund's fourth-quarter 2025 investor letter emphasizes the importance of valuation analysis for AI-focused investments, indicating that mere conviction in AI is insufficient for successful outcomes [1] - The fund achieved a return of 2.2% for Q4 2025, underperforming the benchmark MSCI World Net Total Return Index, which returned 2.5% [1] - For the entire year of 2025, the fund returned 9.8% net of fees, compared to the benchmark's 12.4% [1] Company Highlights - HCA Healthcare, Inc. (NYSE:HCA) is a significant holding for L1 Capital, with a market capitalization of $109.38 billion [2] - HCA's stock closed at $478.84 per share on January 14, 2026, with a one-month return of 2.63% and a 52-week gain of 54.74% [2] - The fund increased its investment in HCA during a period of negative sentiment regarding healthcare policy, making it one of the largest holdings, but has since reduced its position as HCA became one of the smallest holdings [3] Market Sentiment and Future Outlook - The market's initial concerns regarding the impact of healthcare policy under President Trump on private hospitals have shifted, with expectations for operating conditions becoming more balanced [3] - Mizuho analysts see improving margins for HCA Healthcare supporting its performance into 2026, although the stock is not among the top 30 most popular stocks among hedge funds [4] - While HCA is recognized for its potential, some analysts suggest that certain AI stocks may offer greater upside potential with less downside risk [4]

Core Insights - Wall Street has begun a significant earnings week, with the stock market reaching new all-time highs, prompting discussions on investment strategies in a strong bull market [1][2] Group 1: Market Overview - The stock market is experiencing a rally, with some investors hesitant to buy at new highs, potentially missing out on opportunities [1] - Approximately 200 stocks in the S&P 500 are down year-to-date, indicating not all stocks are participating in the rally [2] Group 2: Investment Strategy - Investors are encouraged to consider buying stocks that are climbing, particularly those with strong upward earnings revisions, categorized as Zacks Rank 1 (Strong Buys) [2][3] - A screening method has been developed to identify top momentum stocks, focusing on those within 20% of their 52-week highs and ensuring value through PEG and Price to Sales ratios [4][8] Group 3: Company Spotlight - Universal Health Services (UHS) - Universal Health Services, Inc. is highlighted as a strong buy, being one of the largest providers of hospital and healthcare services in the U.S. [5][6] - UHS has shown steady growth, with a significant Q3 report indicating upward earnings revisions, earning it a Zacks Rank 1 [9] - The company is projected to grow adjusted earnings per share (EPS) by 24% in 2025 and 7% in the following year, following a 50% growth in 2025 [10] - UHS stock has increased by 21% in 2025 and 90% over the past three years, outperforming its industry [13] - The stock trades at a 15% discount to its industry and 52% below its average Zacks price target, suggesting further growth potential [14]

Core Insights - Universal Health Services, Inc. (UHS) reported a significant increase in net income and revenues for the third quarter of 2025 compared to the same period in 2024, with net income attributable to UHS rising to $373.0 million, or $5.86 per diluted share, from $258.7 million, or $3.80 per diluted share, and net revenues increasing by 13.4% to $4.495 billion from $3.963 billion [1][4][27] Financial Performance - Adjusted net income for the third quarter of 2025 was $362.3 million, or $5.69 per diluted share, compared to $252.5 million, or $3.71 per diluted share, in the third quarter of 2024 [2][29] - For the first nine months of 2025, reported net income attributable to UHS was $1.043 billion, or $16.07 per diluted share, up from $809.7 million, or $11.88 per diluted share, in the same period of 2024 [4][27] - Net revenues for the first nine months of 2025 increased by 9.9% to $12.879 billion from $11.714 billion in 2024 [4][29] Operational Metrics - In the third quarter of 2025, adjusted admissions at acute care hospitals increased by 2.0%, and adjusted patient days rose by 0.4% compared to the third quarter of 2024 [6] - Net revenue per adjusted admission increased by 9.8%, and net revenue per adjusted patient day increased by 11.5% during the same period [6] - For the first nine months of 2025, adjusted admissions at acute care hospitals increased by 2.1%, while adjusted patient days increased by 0.6% compared to the same period in 2024 [8] Cash Flow and Liquidity - Net cash provided by operating activities for the first nine months of 2025 was $1.290 billion, down from $1.409 billion in the same period of 2024 [11] - As of September 30, 2025, UHS had $965 million of available borrowing capacity under its revolving credit facility [12] Stock Repurchase Program - The Board of Directors authorized a $1.5 billion increase to the stock repurchase program, bringing the total available repurchase authorization to $1.759 billion [12] - In the third quarter of 2025, UHS repurchased 1.315 million shares at an aggregate cost of approximately $234.3 million [12] Revised Operating Results Forecast - UHS revised its 2025 operating results forecast, increasing the range for consolidated net revenues and adjusted EBITDA, net of noncontrolling interests [13][22] - The revised forecast for net revenues is between $17.306 billion and $17.445 billion, with adjusted EBITDA projected at $2.569 billion [15][22]

Core Insights - Universal Health Services, Inc. (UHS) is a significant player in the U.S. healthcare sector, operating a network of acute care hospitals, behavioral health facilities, and ambulatory centers, competing with major companies like HCA Healthcare and Tenet Healthcare [1] Performance Summary - UHS has experienced a 30-day gain of 3.38%, indicating strong investor confidence and positive market sentiment, despite a recent 1.91% decline over the last 10 days, which may present a buying opportunity for investors [2][6] - The stock is projected to appreciate by 14.75%, supported by UHS's strategic positioning and strong fundamentals within the healthcare sector, making it an appealing option for growth-oriented investors [3][6] Financial Health - UHS's financial health is highlighted by a Piotroski Score of 8, reflecting strong profitability and efficient operations, which is essential for sustaining growth and delivering shareholder value [4] - Analysts have set a target price of $226.33 for UHS, indicating substantial upside potential from current levels, with recent price movements suggesting a potential support level, making it an attractive entry point for investors [5]

Group 1 - Universal Health Services, Inc. (UHS) announced a cash dividend of $0.20 per share to be paid on September 16, 2025, to shareholders of record as of September 2, 2025 [1] - UHS is one of the largest providers of hospital and healthcare services in the United States, operating acute care hospitals, behavioral health facilities, outpatient facilities, and ambulatory care access points [2]