Diamond Hill Capital, an investment management company, released its “Mid Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fourth quarter posted another period of favorable gains for equity markets, with small and large cap positions being stronger performers, returning 2.19% and 2.41%. While the mid-cap range was a relative laggard, with the Russell Mid Cap Index returning 0.16%. The Strategy returned 3.65% (net) in Q4, compared to 0.16% return for the Russell Midcap Index. YTD, the strategy returned 13.47%, outperforming the 10.60% return for the Index. In 2025, AI-related spending remained a key driver in equity markets, though December saw a pause as investors became more cautious about AI developments and potential market bubbles. Given the elevated valuation in the equity market, the Strategy is well-positioned for ongoing levels of heightened uncertainty going forward. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Diamond Hill Mid Strategy highlighted Huntington Ingalls Industries, Inc. (NYSE:HII) as one of its leading contributors. Huntington Ingalls Industries, Inc. (NYSE:HII) is US-based military shipbuilding company. On March 17, 2026, Huntington Ingalls Industries, Inc. (NYSE:HII) stock closed at $422.94 per share. One-month return of Huntington Ingalls Industries, Inc. (NYSE:HII) was -0.46%, and its shares gained 103.90% over the past 52 weeks. Huntington Ingalls Industries, Inc. (NYSE:HII) has a market capitalization of $16.597 billion.
Diamond Hill Mid Strategy stated the following regarding Huntington Ingalls Industries, Inc. (NYSE:HII) in its fourth quarter 2025 investor letter:
“Huntington Ingalls Industries, Inc. (NYSE:HII), the largest shipbuilder for the US Navy, outperformed during the quarter after reporting strong Q3 results and raising full-year guidance. Shares also benefited after the award of a new frigate contract and discussion of a potential “Trump-class” battleship, both of which were viewed as meaningful opportunities. Performance was further supported by improving execution as recent labor challenges eased.”
Huntington Ingalls Industries, Inc. (NYSE:HII) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 39 hedge fund portfolios held Huntington Ingalls Industries, Inc. (NYSE:HII) at the end of the third quarter, the same as in the previous quarter. In 2025, Huntington Ingalls Industries, Inc. (NYSE:HII) reported revenues of $12.5 billion, reflecting an 8.2% increase from 2024. While we acknowledge the risk and potential of Huntington Ingalls Industries, Inc. (NYSE:HII) 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 Huntington Ingalls Industries, Inc. (NYSE:HII) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Huntington Ingalls Industries, Inc. (NYSE:HII) and shared a list of stocks Jim Cramer discussed. 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.
