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 equity market valuations, the Strategy is well-positioned to withstand ongoing uncertainty. 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 stocks like Lear Corporation (NYSE:LEA). Lear Corporation (NYSE:LEA) is an automotive supplier focusing on seating, electrical distribution systems, and related components for automotive original equipment manufacturers. On March 19, 2026, Lear Corporation (NYSE:LEA) stock closed at $115.58 per share. One-month return of Lear Corporation (NYSE:LEA) was -14.23%, and its shares gained 22.57% over the past 52 weeks. Lear Corporation (NYSE:LEA) has a market capitalization of $5.995 billion.
Diamond Hill Mid Strategy stated the following regarding Lear Corporation (NYSE:LEA) in its fourth quarter 2025 investor letter:
“We exited our position in automotive supplier Lear Corporation (NYSE:LEA) given shifts in electric vehicle demand and slowing growth at some automakers. While the company remains a stable business in the auto industry, its e-systems segment has struggled to grow margins amid changing hybrid and electric vehicle production schedules, and increased exposure to Chinese original equipment manufacturers has not been enough to materially lift volumes.”
Lear Corporation (NYSE:LEA) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 28 hedge fund portfolios held Lear Corporation (NYSE:LEA) at the end of the fourth quarter, compared to 38 in the previous quarter. Lear Corporation (NYSE:LEA) posted a 5% increase in revenue in the fourth quarter, generating $23.3 billion for the full year. While we acknowledge the risk and potential of Lear Corporation (NYSE:LEA) 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 Lear Corporation (NYSE:LEA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Lear Corporation (NYSE:LEA) and shared the list of cheap stocks with strong buy ratings on Wall Street. 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.
