Allegiant Travel (ALGT) Rose on Strong Demand Trends

Diamond Hill Capital, an investment management company, released its “Small Cap Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fourth quarter posted another period of favorable gains for equity markets, with the Russell 2000 Index returning 2.19%, roughly in line with the Russell 1000 Index’s 2.41% gain. Health care (+18.6%) emerged as the best-performing sector in the Russell 2000 Index. Heightened uncertainty and geopolitical risks contributed to a mixed market environment in 2025 and Q4, yet the Russell 2000 Index still posted a 12.81% gain for the year. Heading into 2026, the firm continues to focus on resilient businesses that can sustain earnings in a volatile landscape. The Strategy returned 4.88% (net of fees) in the quarter compared to the Russell 2000 Index’s 2.19% gain. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Diamond Hill Small Cap Strategy highlighted Allegiant Travel Company (NASDAQ:ALGT) as one of the leading contributors. Based in Las Vegas, Nevada, Allegiant Travel Company (NASDAQ:ALGT) is a leisure travel company. On February 4, 2026, Allegiant Travel Company (NASDAQ:ALGT) stock closed at $99.86 per share. Allegiant Travel Company (NASDAQ:ALGT) delivered a 7.99% return in the past month, and its shares are up 11.84% over the past twelve months. Allegiant Travel Company (NASDAQ:ALGT) has a market capitalization of $1.829 billion.

Diamond Hill Small Cap Strategy stated the following regarding Allegiant Travel Company (NASDAQ:ALGT) in its fourth quarter 2025 investor letter:

“Regional airline Allegiant Travel Company (NASDAQ:ALGT) reported strong near-term demand trends in Q4 alongside a generally softer jet fuel environment, which improved investor sentiment around its ability to deliver margin improvement.”

Is Allegiant Travel Company (ALGT) the Best Airline Stock to Buy Now?

Allegiant Travel Company (NASDAQ:ALGT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 22 hedge fund portfolios held Allegiant Travel Company (NASDAQ:ALGT) at the end of the third quarter, compared to 23 in the previous quarter. While we acknowledge the risk and potential of Allegiant Travel Company (NASDAQ:ALGT) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Allegiant Travel Company (NASDAQ:ALGT) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Allegiant Travel Company (NASDAQ:ALGT) and shared a list of cheap stocks to buy for the next five years. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.