Madison Small Cap Fund, managed by Madison Funds, released its Q1 2026 investor letter. A copy of the letter is available to download here. The Madison Small Cap Fund (class I) increased by 0.10% in the first quarter, trailing behind the Russell 2000 Index (up 0.89%) and the Russell 2500 Index (up 2.04%). Despite slightly underperforming the benchmark in the quarter, core positions and IT investments showed solid performance. From a style perspective, value stocks outperformed growth, with the Russell 2000 Value Index rising ~4.5% and the Russell 2000 Growth Index falling almost 3%. The outperformance of the value is driven by weakness in speculative names aligning with the Fund’s style and preference for quality, profitable franchises. The Fund believes the market volatility, influenced by AI concerns and geopolitical tensions, presents a potential opportunity for patient investors. Please review the Fund’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, Madison Small Cap Fund Strategy highlighted stocks such as Charles River Laboratories International, Inc. (NYSE:CRL). Charles River Laboratories International, Inc. (NYSE:CRL) is a contract research organization that provides drug discovery, development, and safety testing services to pharmaceutical and biotechnology firms. On June 11, 2026, Charles River Laboratories International, Inc. (NYSE:CRL) closed at $188.06 per share. One-month return of Charles River Laboratories International, Inc. (NYSE:CRL) was 24.67%, and its shares gained 25.83% over the past 52 weeks. Charles River Laboratories International, Inc. (NYSE:CRL) has a market capitalization of $9.06 billion.
Madison Small Cap Fund stated the following regarding Charles River Laboratories International, Inc. (NYSE:CRL) in its Q1 2026 investor letter:
“Our worst performing sector in the first quarter was Healthcare. Our investments in drug development companies like Charles River Laboratories International, Inc. (NYSE:CRL) and Medpace Holdings (MEDP) pulled back, driven by AI disruption fears. Our work suggests disruption fears are overexaggerated. Although we agree that drug development will benefit greatly from the implementation of AI tools, we disagree that this will lead to a lessening of drug development spending. We believe this efficiency will lead to more viable drug candidates and an increase in demand for clinical research services. We also believe that contract research organizations’ (CROs) implementation of these tools can improve program design times, shorten trial timelines and improve clinical submissions. Larger CROs, such as Medpace and Charles River Labs, have ample resources to capture this value for both them and their clients. Despite the pullbacks, we remain enthusiastic about these investments and have selectively added to our positions.”
Charles River Laboratories International, Inc. (NYSE:CRL) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 43 hedge fund portfolios held Charles River Laboratories International, Inc. (NYSE:CRL) at the end of the first quarter, compared to 53 in the previous quarter. While we acknowledge the risk and potential of Charles River Laboratories International, Inc. (NYSE:CRL) 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 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. (NYSE:CRL) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Charles River Laboratories International, Inc. (NYSE:CRL) and shared ClearBridge Small Cap Growth Strategy’s views on the company. 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.
