Madison Small Cap Fund, managed by Madison Funds, released its Q1 2026 investor letter. A copy of the letter is available to download here. The Madison Small Cap Fund (class I) increased by 0.10% in the first quarter, trailing behind the Russell 2000 Index (up 0.89%) and the Russell 2500 Index (up 2.04%). Despite slightly underperforming the benchmark in the quarter, core positions and IT investments showed solid performance. From a style perspective, value stocks outperformed growth, with the Russell 2000 Value Index rising ~4.5% and the Russell 2000 Growth Index falling almost 3%. The outperformance of the value is driven by weakness in speculative names aligning with the Fund’s style and preference for quality, profitable franchises. The Fund believes the market volatility, influenced by AI concerns and geopolitical tensions, presents a potential opportunity for patient investors. Please review the Fund’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, Madison Small Cap Fund Strategy highlighted Globus Medical, Inc. (NYSE:GMED). Globus Medical, Inc. (NYSE:GMED) is a leading healthcare device company that develops solutions for patients with musculoskeletal disorders. On June 11, 2026, Globus Medical, Inc. (NYSE:GMED) closed at $80.52 per share. One-month return of Globus Medical, Inc. (NYSE:GMED) was 5.06%, and its shares gained 36.71% over the past 52 weeks. Globus Medical, Inc. (NYSE:GMED) has a market capitalization of $10.93 billion.
Madison Small Cap Fund stated the following regarding Globus Medical, Inc. (NYSE:GMED) in its Q1 2026 investor letter:
“We liquidated our position in Globus Medical, Inc. (NYSE:GMED) after a multi-year period. The company has successfully integrated its Nuvasive acquisition and continues to show successful adoption of its industry-leading robotics platform. The success has driven GMED’s market cap to $12B, thus we elected to sell and focus on smaller alternatives. Our most recent intrinsic value estimate was $85 versus the current price of $90/share.”
Globus Medical, Inc. (NYSE:GMED) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 52 hedge fund portfolios held Globus Medical, Inc. (NYSE:GMED) at the end of the first quarter, up from 42 in the previous quarter. in Q1 2026, Globus Medical, Inc. (NYSE:GMED) generated revenue of $759.9 million, marking an increase of 27% year-over-year as reported and 25.5% on a constant currency basis. While we acknowledge the risk and potential of Globus Medical, Inc. (NYSE:GMED) 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 GLOBUS MEDICAL, INC. (NYSE:GMED) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Globus Medical, Inc. (NYSE:GMED) and shared the list of most profitable growth stocks to buy. 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.
