Sycamore Capital Management, a franchise of Victory Capital Management, released its Q2 2026 investor letter for “Sycamore Mid Cap Value Equity Strategy”. A copy of the letter can be downloaded here. Sycamore Capital’s Mid Cap Value investment team focuses on a bottom-up approach to identify undervalued businesses with growth potential. In Q2 2026, the strategy returned 9.6% (net) underperforming the Russell Midcap Value Index’s 13.83% return, due to both stock selection and sector allocation. Small-cap equities outpaced both large- and mid-cap equities during the second quarter of 2026. While U.S. indices like the S&P 500® Index saw significant gains in the quarter, market dynamics shifted towards a select group of stocks driven by AI-related momentum. The commentary highlights underlying risks, such as market concentration and the influence of passive investment vehicles, reminding investors to reconsider their exposure to AI. Overall, it calls for a cautious evaluation of current investments in light of these risks. Please review the Fund’s top five holdings to gain insights into their key selections for 2026.
In its Q2 2026 investor letter, Sycamore Mid Cap Value Equity Strategy highlighted L3Harris Technologies, Inc. (NYSE:LHX). Founded in 1895, L3Harris Technologies, Inc. (NYSE:LHX) is an aerospace and defense company. On August 12, 2026, L3Harris Technologies, Inc. (NYSE:LHX) closed at $290.74 per share, reflecting a market capitalization of $54.14 billion. L3Harris Technologies, Inc. (NYSE:LHX) posted a one‑month return of 2.22%, while its shares gained 7.26% over the past 52 weeks.
Sycamore Mid Cap Value Equity Strategy stated the following regarding L3Harris Technologies, Inc. (NYSE:LHX) in its Q2 2026 investor letter:
“L3Harris Technologies, Inc. (NYSE:LHX), a defense contractor and IT services provider, rounded out the list of top detractors, with shares trading lower amid a broad defense sector derating. After several quarters of strong performance, the sector pulled back on concerns the proposed $1.5 trillion defense budget would not pass Congress. Investors worry the $350 billion reconciliation package inside that budget will face hurdles heading into the midterms. Though LHX has meaningful base-budget exposure, cutting or materially reducing the reconciliation package would weigh on projects expected to benefit the company, such as Golden Dome. Shares also came under pressure after LHX announced the spinoff of its missile solutions division, Axyv. That said, the company continues to see strong momentum across each of its segments and remains well-positioned for the Department of War’s long-term priorities. Our thesis for LHX remains intact.”
L3Harris Technologies, Inc. (NYSE:LHX) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 59 hedge fund portfolios held L3Harris Technologies, Inc. (NYSE:LHX) at the end of the first quarter, up from 48 in the previous quarter. While we acknowledge the risk and potential of L3Harris Technologies, Inc. (NYSE:LHX) 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 L3Harris Technologies, Inc. (NYSE:LHX) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered L3Harris Technologies, Inc. (NYSE:LHX) and shared a list of best space technology stocks to buy. In addition, please check out our hedge fund investor letters Q2 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.
