TCW funds, an investment management company, released its “TCW Relative Value Mid Cap Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equities finished the year on a positive note, with the S&P 500 Total Return (USD) increasing by 2.65% and achieving a remarkable 17.9% in 2025. The AI sector continued to thrive following Trump’s tariff announcements. While there are concerning indicators that echo the Dot-Com bubble, the underlying companies appear to be defying odds with technological advancements, strong financials, and reasonable valuations. Looking ahead, the firm anticipates the equity market will remain highly sensitive to policy changes and earnings reports, with valuations staying near historically high levels. Class I shares of the fund returned 4.54% in Q4, outperforming the Russell Midcap® Value Index benchmark, which returned 1.42%. In addition, please check the Fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, TCW Relative Value Mid Cap Fund noted stocks like Westinghouse Air Brake Technologies Corporation (NYSE:WAB). Westinghouse Air Brake Technologies Corporation (NYSE:WAB) is a leading rail technology and equipment company that provides locomotives, equipment, systems, and services. On April 6, 2026, Westinghouse Air Brake Technologies Corporation (NYSE:WAB) closed at $254.03 per share. One-month return of Westinghouse Air Brake Technologies Corporation (NYSE:WAB) was 2.95%, and its shares gained 58.55% over the past 52 weeks. Westinghouse Air Brake Technologies Corporation (NYSE:WAB) has a market capitalization of $43.32 billion.
TCW Relative Value Mid Cap Fund stated the following regarding Westinghouse Air Brake Technologies Corporation (NYSE:WAB) in its fourth quarter 2025 investor letter:
“The investment in Westinghouse Air Brake Technologies Corporation (NYSE:WAB) was eliminated over a reasonable concern that its core freight business will come under pressure from any incremental Class 1 railroad consolidation scenario. Wabtec management deserves credit for infusing and nurturing a lean operating culture that has helped through cycle margins and cash f low. Its lean operating playbook extended into disciplined M&A where Wabtec buys products, improves operating performance, and cross-sells these products into its freight and transit customer base. However, given that more than half of Wabtec’s revenues are derived from customer-concentrated freight end markets, it is reasonable to believe that numerous high margin and high-ticket products could be pressured over the medium term if incremental rail consolidation due to one or two transcontinental railroads improves transcontinental network fluidity and stronger customer procurement leverage over Wabtec. Given these reasonable medium-term concerns, the position was eliminated.”
Westinghouse Air Brake Technologies Corporation (NYSE:WAB) 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 Westinghouse Air Brake Technologies Corporation (NYSE:WAB) at the end of the fourth quarter, compared to 62 in the previous quarter. While we acknowledge the risk and potential of Westinghouse Air Brake Technologies Corporation (NYSE:WAB) 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 Westinghouse Air Brake Technologies Corporation (NYSE:WAB) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Westinghouse Air Brake Technologies Corporation (NYSE:WAB) and shared Aristotle Capital’s, an investment management company, insights on the company. 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.
