The London Company released its Q1 2026 investor letter for “The London Company Small-Mid Cap Strategy”. In early 2026, US equities declined, with the Russell 3000 falling 4% and the S&P posting losses. A copy of the letter is available to download here. The year started positively with a broad rally, but sentiment reversed in March due to the Iran conflict. Crude oil prices rose, raising inflation concerns and shifting the Fed’s outlook from rate cuts to hikes. Large-cap growth suffered double-digit losses amid weakness in Big Tech and AI concerns in software, while small caps proved resilient. Sector dispersion was extreme; Energy surged over 35%, while Tech fell over 9%. Value, Momentum, and Yield drove returns from a factor perspective. In this environment, the London Company Small-Mid Cap portfolio declined 3.4% (-3.6% net) in the quarter vs. a 2.0% increase in the Russell 2500 Index. The relative underperformance was driven by both sector exposure and stock selection. Structural underweight to Energy and commodity-linked industries was a significant detractor. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, The London Company Small-Mid Cap Strategy highlighted Cooper Companies, Inc. (NASDAQ:COO). The Cooper Companies, Inc. (NASDAQ:COO) is a medical device company that operates through CooperVision and CooperSurgical segments. On June 11, 2026, The Cooper Companies, Inc. (NASDAQ:COO) closed at $67.51 per share. One-month return of The Cooper Companies, Inc. (NASDAQ:COO) was 13.25%, and its shares lost 3.14% over the past 52 weeks. The Cooper Companies, Inc. (NASDAQ:COO) has a market capitalization of $13.17 billion.
The London Company Small-Mid Cap Strategy stated the following regarding The Cooper Companies, Inc. (NASDAQ:COO) in its Q1 2026 investor letter:
“Initiated: The Cooper Companies, Inc. (NASDAQ:COO) – COO is a global medical device company operating two divisions: CooperVision (contact lenses, >65% of revenue) and CooperSurgical (women’s healthcare). CooperVision is a high-quality business in an oligopolistic industry where four players control 95% of the market. COO benefits from high customer switching costs, leading positions in faster growing specialty lenses, and deep customer relationships that have driven above-market growth. While margins currently trail peers due to a multi-year investment cycle, significant expansion potential exists as capex moderates. Recent share price weakness reflects cyclical pressures rather than fundamental deterioration, activist involvement creates a catalyst for operational improvements. Valuation is attractive, supported by recent insider buying.”
The Cooper Companies, Inc. (NASDAQ:COO) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 49 hedge fund portfolios held The Cooper Companies, Inc. (NASDAQ:COO) at the end of the first quarter, compared to 53 in the previous quarter. While we acknowledge the risk and potential of The Cooper Companies, Inc. (NASDAQ:COO) 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 THE COOPER COMPANIES, INC. (NASDAQ:COO) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered The Cooper Companies, Inc. (NASDAQ:COO) and shared the list of most oversold 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.
