13D Activist Fund is a mutual fund that focuses on companies that are targeted by shareholder activists. The Fund released its Q4 2025 investor letter. A copy of the letter can be downloaded here. In Q4 2025, the I share (DDDIX) returned 0.40%, net of fees and expenses, versus 2.19% for the Russell 2000 Index. YTD, the Fund returned 3.06% vs. the Index’s 12.81% return. It is extremely challenging for active funds to beat market-weighted indexes in a market dominated by large-cap firms. However, the level of shareholder activism continues to improve despite the challenges. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, 13D Activist Fund highlighted stocks like WEX Inc. (NYSE:WEX). WEX Inc. (NYSE:WEX) is leading diversified payments company operating in mobility, corporate payments and benefits segments. On March 05, 2026, WEX Inc. (NYSE:WEX) stock closed at $166.06 per share. One-month return of WEX Inc. (NYSE:WEX) was 1.79%, and its shares gained 1.91% over the past 52 weeks. WEX Inc. (NYSE:WEX) has a market capitalization of $5.519 billion.
13D Activist Fund stated the following regarding WEX Inc. (NYSE:WEX) in its fourth quarter 2025 investor letter:
“This is a US activist campaign by Impactive Capital. WEX Inc. (NYSE:WEX) is a diversified payments company with three high quality, market-leading segments – Mobility (~50% of revenue), Corporate Payments (~20%), and Benefits (~30%) – each characterized by strong competitive moats, recurring revenue, dominant market share (30–50%), and long-standing customer relationships. Despite these strengths, WEX trades at a deeply discounted valuation of ~9.2x NTM P/E versus its historical average (~17x) and peers (~19x).
ROIC averaging approximately 9% under CEO Melissa Smith versus approximately 21% at peer Corpay; (ii) empire building via non-core acquisitions (e.g., E-Net, Payzer), resulting in an overly complex asset mix valued at the lowest common denominator between its higher multiple benefits segment and its payments businesses; (iii) operational under-earning, driven by bloated SG&A and underutilized pricing power; and (iv) weak governance and misaligned incentives, including revenue-based compensation that encourages growth over value creation. CEO Smith has earned roughly $100 million during her tenure while WEX has underperformed the market by nearly 130 percentage points.”
WEX Inc. (NYSE:WEX) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 39 hedge fund portfolios held WEX Inc. (NYSE:WEX) at the end of the fourth quarter, up from 31 in the previous quarter. In Q4 2025, WEX Inc. (NYSE:WEX) generated revenue of $672.9 million, marking an increase of 5.7% year-over-year. While we acknowledge the risk and potential of WEX Inc. (NYSE:WEX) 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 WEX Inc. (NYSE:WEX) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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.
