Madison Investments, an investment advisor, released its fourth-quarter 2025 investor letter for “Madison Small Cap Fund”. A copy of the letter can be downloaded here. The fourth quarter was challenging for the fund and continued to underperform its benchmark, the Russell 2000 Index. The fund (Class I) returned -0.4%, lagging the benchmark’s 2.2% return. Sector allocation negatively impacted the Fund’s performance this quarter, with healthcare being the weakest sector. The Fund remains optimistic that the speculative market is losing momentum, but cautious, given the saying “markets can stay irrational longer than you can stay solvent”. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its fourth-quarter 2025 investor letter, Madison Small Cap Fund highlighted Cogent Communications Holdings, Inc. (NASDAQ:CCOI). Cogent Communications Holdings, Inc. (NASDAQ:CCOI) is an internet services company that provides high-speed Internet access, private network, and data center colocations. On March 13, 2026, Cogent Communications Holdings, Inc. (NASDAQ:CCOI) stock closed at $18.80 per share. One-month return of Cogent Communications Holdings, Inc. (NASDAQ:CCOI) was -28.95%, and its shares lost 73.49% over the past 52 weeks. Cogent Communications Holdings, Inc. (NASDAQ:CCOI) has a market capitalization of $941.169 million.
Madison Small Cap Fund stated the following regarding Cogent Communications Holdings, Inc. (NASDAQ:CCOI) in its fourth quarter 2025 investor letter:
“We decided to exit our position in Cogent Communications Holdings, Inc. (NASDAQ:CCOI). Our thesis hinged on the company cutting its dividend, a move widely anticipated by the market, and reestablishing growth in EBITDA. These combined moves would have reversed several quarters of increased leverage following the acquisition and integration of assets from T-Mobile. Instead, the company focused on EBITDA and was forced to suspend its dividend temporarily. Although we believe the dividend suspension is the right move, without that valuation ballast, the stock will trade on an uncertain EBITDA multiple. Without this ballast and combined with elevated leverage on the balance sheet, small variations in the multiple can lead to extreme swings in the equity value. We’ve decided to step back and wait until leverage improves.”
Cogent Communications Holdings, Inc. (NASDAQ:CCOI) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 26 hedge fund portfolios held Cogent Communications Holdings, Inc. (NASDAQ:CCOI) at the end of the fourth quarter, compared to 31 in the previous quarter. While we acknowledge the risk and potential of Cogent Communications Holdings, Inc. (NASDAQ:CCOI) 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 Cogent Communications Holdings, Inc. (NASDAQ:CCOI) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Cogent Communications Holdings, Inc. (NASDAQ:CCOI) and shared most promising long-term stocks to buy according to hedge funds. 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.
