The London Company, an investment management company, released its “Income Equity Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund’s Income Equity Portfolio declined 1.4% gross (-1.6% net) in the fourth quarter of 2025, underperforming the Russell 1000 Value Index, which gained 3.8%, as stock selection weighed on relative performance despite supportive sector exposure. U.S. equities extended their rally, with the Russell 3000 Index rising 2.4% and the S&P 500 posting similar gains, supported by strong earnings growth, additional Federal Reserve rate cuts, and easing trade tensions, though markets faced headwinds from softening labor markets, AI investment scrutiny, and a prolonged government shutdown. For the full year, the portfolio delivered +14.4% gross (+13.5% net) versus +15.9% for the benchmark, finishing in line with its long-term upside capture objectives despite a challenging backdrop for Quality, Yield, and Low Volatility factors. Management noted that value factors led returns during the quarter, while the portfolio’s lack of direct bank exposure and its tilt toward Quality and Yield-oriented stocks acted as headwinds in a market environment that favored higher-beta and more cyclically sensitive segments. In addition, please check the Strategy’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, The London Company Income Equity Strategy highlighted stocks like Cummins Inc. (NYSE:CMI). Cummins Inc. (NYSE:CMI) designs and manufactures engines, power generation systems, and related technologies used across commercial vehicles, industrial equipment, and energy applications. The one-month return of Cummins Inc. (NYSE:CMI) was -7.30% while its shares traded between $260.02 and $617.98 over the last 52 weeks. On March 11, 2026, Cummins Inc. (NYSE:CMI) stock closed at approximately $556.14 per share, with a market capitalization of about $76.84 billion.
The London Company Income Equity Strategy stated the following regarding Cummins Inc. (NYSE:CMI) in its Q4 2025 investor letter:
Cummins Inc. (NYSE:CMI) – CMI reported strong results, driven by Power Systems strength tied to data center demand, while the on-highway truck market remains weak. There are some signs that Class 8 deliveries are nearing a bottom. CMI remains one of the few global suppliers capable of supporting large-scale data center backup power requirements. As the market leader in heavy-duty diesel engines, CMI’s diversified business mix, strong competitive positions across its portfolio, and high-margin aftermarket exposure provide a durable foundation for long-term growth.
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Cummins Inc. (NYSE:CMI) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 67 hedge fund portfolios held Cummins Inc. (NYSE:CMI) at the end of the fourth quarter, which was 64 in the previous quarter. While we acknowledge the risk and potential of Cummins Inc. (NYSE:CMI) 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 Cummins Inc. (NYSE:CMI) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Cummins Inc. (NYSE:CMI) and shared the list of stocks that were discussed by Jim Cramer. 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.
