Longleaf Partners, managed by Southeastern Asset Management, released its second-quarter 2026 investor letter for its “Partners Fund”. A copy of the letter can be downloaded here. The letter states that the portfolio holdings are attractive now based on both P/V and P/FCF metrics. However, the Fund returned 3.87% in the quarter, significantly lagging the S&P 500’s 15.20% return and the Russell 1000 Value Index’s 13.87% gain. An underweight in Information Technology (IT) primarily contributed to the underperformance. The market’s preference for overvalued stocks in Industrials and other sectors led to inflated multiples, overshadowing real earnings power. The Firm’s investment approach focuses on median, unweighted multiples, prioritizing growth in free cash flow per share, the potential for multiple expansion, and strategic initiatives. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Longleaf Partners Fund highlighted Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN). Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is a biotechnology company that develops and commercializes medicines to treat various diseases. On July 10, 2026, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) closed at $664.52 per share, reflecting a market capitalization of $69.66 billion. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) posted a one-month return of 8.06%, while its shares gained 16.46% over the past 52 weeks.
Longleaf Partners Fund stated the following regarding Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) in its Q2 2026 investor update:
“Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) – Healthcare company Regeneron was a detractor in the quarter after disappointing trial results for one of its pipeline drugs. When we first invested in the company last year, the keys to the case were continued strength at Dupixent, Eylea stabilization, pipeline success and intelligent capital allocation. Dupixent (over 50% of the value) has outgrown our expectations and Eylea (less than 15% of the value) has stabilized after some initial hiccups. There were three key pipeline readouts coming over the next 18 months when we invested, and Regeneron has now basically gone one out of three, when we thought two out of three was more likely. We trimmed some of our holding when the market was running hotter on Regeneron’s pipeline prospects earlier this year. The market is now focused on that weaker near-term batting average and ignoring the company’s strong long-term record. We have been encouraged to see the company lean into share repurchase when it has been most undervalued and continue to avoid large, value-destructive M&A.”
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) 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 Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) at the end of the first quarter, compared to 75 in the previous quarter. While we acknowledge the risk and potential of Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) 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 Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) and shared the list of best innovative healthcare stocks to buy. 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.
