Diamond Hill Capital, a First Eagle Investment Management company, issued its Q1 2026 investor letter for its “Large Cap Strategy”. A copy of the letter is available to download here. The Strategy declined 2.39% (net of fees), trailing the Russell 1000 Value Index’s 2.10%. The performance was positively affected by stock selection in industrials and consumer discretionary, along with an underweight in communication services. While stock selection in information technology, financials, and health care was the largest detractor from relative performance. The war in Iran is creating uncertainty in markets. However, it effectively supported the portfolio’s focus on oil-sensitive exploration and production companies. Technology companies are under pressure in Q1 amid concerns about AI’s potential negative effects on their businesses, but their competitive advantages remain stronger than their current valuations suggest. Despite these challenges, the market is beginning to expand into more attractive opportunities, especially in defensive sectors and cyclicals that do not benefit from AI. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Diamond Hill Capital Large Cap Strategy highlighted Capital One Financial Corporation (NYSE:COF). Capital One Financial Corporation (NYSE:COF) is a leading US-based financial services holding company for Capital One, National Association. On May 22, 2026, Capital One Financial Corporation (NYSE:COF) closed at $187.79 per share. One-month return of Capital One Financial Corporation (NYSE:COF) was -3.26%, and its shares gained 1.46% over the past 52 weeks. Capital One Financial Corporation (NYSE:COF) has a market capitalization of $116.86 billion.
Diamond Hill Capital Large Cap Strategy stated the following regarding Capital One Financial Corporation (NYSE:COF) in its Q1 2026 investor letter:
“Consumer finance company Capital One Financial Corporation (NYSE:COF) underperformed during the quarter following its announced acquisition of Brex, an AI-native commercial fintech platform. While the market generally viewed the deal’s strategic and financial merits favorably over the long term, shares were pressured by near term concerns, including higher planned marketing spend to capture credit opportunities and rising uncertainty around future credit costs amid macro volatility.”
Capital One Financial Corporation (NYSE:COF) ranks 18 on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 136 hedge fund portfolios held Capital One Financial Corporation (NYSE:COF) at the end of the fourth quarter, up from 129 in the previous quarter. While we acknowledge the risk and potential of Capital One Financial Corporation (NYSE:COF) 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 Capital One Financial Corporation (NYSE:COF) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Capital One Financial Corporation (NYSE:COF) and shared the list of best value stocks to buy for long term investment. In addition, please check out our hedge fund investor letters Q1 2026 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.
