Hotchkis & Wiley, an investment management company, released its second-quarter 2026 investor letter for the “Hotchkis & Wiley Mid-Cap Value Fund.” A copy of the letter can be downloaded here. Equity markets posted strong returns in the second quarter of 2026, with the Russell Midcap Index rising 13.8% and the Russell Midcap Value Index returning 13.4%, despite concerns about inflation, a hawkish Federal Reserve, and rising oil prices due to the Iran conflict. Narrow market leadership was evident, particularly semiconductor stocks and other stocks in the AI sector, which saw returns exceeding 100%. The Firm favors quality businesses with attractive valuations, believing that fears regarding AI’s impact are overstated. The Hotchkis & Wiley Mid-Cap Value Fund lagged the Russell Midcap Value Index, achieving a 4.74% return in the second quarter, primarily due to underperformance in technology and energy sectors, while stock selection in healthcare contributed positively. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Hotchkis & Wiley Mid-Cap Value Fund highlighted Centene Corporation (NYSE:CNC) as a leading performance contributor. Centene Corporation (NYSE:CNC) is a US-based healthcare enterprise that offers services to underinsured and uninsured families and commercial organizations. On August 3, 2026, Centene Corporation (NYSE:CNC) closed at $63.76 per share, reflecting a market capitalization of $31.49 billion. Centene Corporation (NYSE:CNC) posted a one-month return of -3.57%, while its shares gained 146.27% over the past 52 weeks.
Hotchkis & Wiley Mid-Cap Value Fund stated the following regarding Centene Corporation (NYSE:CNC) in its Q2 2026 investor letter:
“Centene Corporation (NYSE:CNC) is a managed care organization focused on the Medicaid market, with approximately 28 million at-risk enrollees and one of the largest Medicaid market share among publicly traded peers. It is a capital-light business well positioned to potentially benefit as the U.S. continues shifting healthcare toward government-funded, cost-controlled programs. Centene outperformed sharply this quarter as adjusted EPS beat consensus by 48%, management raised full-year guidance, and investors gained confidence that the Medicaid margin recovery and ACA membership reset were both tracking ahead of plan.”
Centene Corporation (NYSE:CNC) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 72 hedge fund portfolios held Centene Corporation (NYSE:CNC) at the end of the first quarter, compared to 78 in the previous quarter. While we acknowledge the risk and potential of Centene Corporation (NYSE:CNC) 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 Centene Corporation (NYSE:CNC) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Centene Corporation (NYSE:CNC) and shared the list of firms beating earnings expectations. Oakmark Select Fund noted in its Q2 2026 investor letter that Centene Corporation (NYSE:CNC) rallied during the quarter on strong results, reinforcing its position as a leader in government‑managed care. In addition, please check out our hedge fund investor letters Q2 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.
