WESCO (WCC) Traded Down Due to Cyclical Exposure and Leveraged Balance Sheet

Diamond Hill Capital, an investment management company, released its “Mid Cap Strategy” investor letter for the first quarter of 2025. A copy of the letter can be downloaded here. The first quarter of 2025 was mixed due to a flurry of activity from the new presidential administration. However, the strategy outperformed the Russell Midcap Index in Q1, returning -1.26% (net) vs -3.40% for the index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2025.

In its first-quarter 2025 investor letter, Diamond Hill Mid Cap Strategy highlighted stocks such as WESCO International, Inc. (NYSE:WCC). WESCO International, Inc. (NYSE:WCC) offers business-to-business distribution, logistics services, and supply chain solutions. The one-month return of WESCO International, Inc. (NYSE:WCC) was 7.52%, and its shares lost 3.99% of their value over the last 52 weeks. On June 4, 2025, WESCO International, Inc. (NYSE:WCC) stock closed at $170.83 per share with a market capitalization of $8.34 billion.

Diamond Hill Mid Cap Strategy stated the following regarding WESCO International, Inc. (NYSE:WCC) in its Q1 2025 investor letter:

“Shares of industrial distributor WESCO International, Inc. (NYSE:WCC) were pressured amid the company’s cyclical exposure and leveraged balance sheet. However, despite recent mixed fundamentals, we believe the company can still leverage its significant scale advantage to take share and improve margins over time. Further, we expect it to benefit from several secular tailwinds, which should contribute to strong free cash-flow generation, allowing it to deleverage over time.”

WESCO International, Inc. (WCC): Among Unknown Billionaire Phill Gross’ Stock Picks with Huge Upside Potential

A team of professionals operating high and medium voltage project design.

WESCO International, Inc. (NYSE:WCC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held WESCO International, Inc. (NYSE:WCC) at the end of the first quarter, which was 62 in the previous quarter. While we acknowledge the potential of WESCO International, Inc. (NYSE:WCC) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered WESCO International, Inc. (NYSE:WCC) and shared unknown billionaire Phill Gross’ stock picks with huge upside potential. In addition, please check out our hedge fund investor letters Q1 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.