Polen Capital, an investment management company, released its “Polen Focus Growth Strategy” first-quarter 2026 investor letter. A copy of the letter can be downloaded here. The first quarter of 2026 was highly volatile for US equities, driven by AI disruption concerns and the US-Israel conflict in Iran and the Middle East. In this backdrop, the Polen Focus Growth Strategy declined 17.16% in the quarter, compared to a -9.78% return for the Russell 1000 Growth and -4.33% return for the S&P 500. The Strategy focuses on mission-critical businesses with recurring revenue and competitive advantages and capitalizes on the volatility to increase investments in software and semiconductor companies. The Strategy remains confident in the long-term potential of the Portfolio, emphasizing businesses with strong economic moats, robust balance sheets, and multi-year earnings growth. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Polen Focus Growth Strategy highlighted stocks like CoStar Group, Inc. (NASDAQ:CSGP). CoStar Group, Inc. (NASDAQ:CSGP) is an information, analytics, and online marketplace services provider for commercial and residential property markets. On April 28, 2026, CoStar Group, Inc. (NASDAQ:CSGP) closed at $35.96 per share. One-month return of CoStar Group, Inc. (NASDAQ:CSGP) was -9.26%, and its shares lost 51.52% over the past 52 weeks. CoStar Group, Inc. (NASDAQ:CSGP) has a market capitalization of $15.24 billion.
Polen Focus Growth Strategy stated the following regarding CoStar Group, Inc. (NASDAQ:CSGP) in its Q1 2026 investor letter:
“CoStar Group, Inc. (NASDAQ:CSGP) has come under pressure from a combination of the negative AI narrative on software as well as its large investment in its Homes.com business that has driven company margins much lower than normal. We believe CoStar has deep domain expertise and data in commercial and residential real estate that is not replicable by large language models scraping the internet. And while we have some concern about the level of spend on Homes.com, we acknowledge that most of that capital has already been allocated and the revenue and profit expectations going forward from here look far better. In fact, we expect CoStar to be one of, if not the fastest growing company in the Portfolio over the next 3 to 5 years based on earnings per share. We added to our position here during the quarter.”
CoStar Group, Inc. (NASDAQ:CSGP) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 58 hedge fund portfolios held CoStar Group, Inc. (NASDAQ:CSGP) at the end of the fourth quarter, up from 57 in the previous quarter. While we acknowledge the risk and potential of CoStar Group, Inc. (NASDAQ:CSGP) 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 CoStar Group, Inc. (NASDAQ:CSGP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered CoStar Group, Inc. (NASDAQ:CSGP) and shared Baron Focused Growth Fund’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.
