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 Fastenal Company (NASDAQ:FAST). Fastenal Company (NASDAQ:FAST) is an industrial supply distributor providing fasteners, tools, safety products, and inventory management solutions to manufacturing and construction customers. The one-month return of Fastenal Company (NASDAQ:FAST) was 2.31% while its shares traded between $35.31 and $50.63 over the last 52 weeks. On March 11, 2026, Fastenal Company (NASDAQ:FAST) stock closed at approximately $46.59 per share, with a market capitalization of about $53.50 billion.
The London Company Income Equity Strategy stated the following regarding Fastenal Company (NASDAQ:FAST) in its Q4 2025 investor letter:
Fastenal Company (NASDAQ:FAST) – FAST underperformed during the quarter as elevated expectations reset and industrial demand recovered more slowly than expected. Sales growth from new customer sites remained. Strong cash generation, a healthy balance sheet, and disciplined capital allocation continue to provide downside support.
Fastenal Company (NASDAQ:FAST) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 50 hedge fund portfolios held Fastenal Company (NASDAQ:FAST) at the end of the fourth quarter, which was 47 in the previous quarter. While we acknowledge the risk and potential of Fastenal Company (NASDAQ:FAST) 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 Fastenal Company (NASDAQ:FAST) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Fastenal Company (NASDAQ:FAST) and shared the list of best NASDAQ dividend stocks to buy now. 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.
