Matrix Asset Advisors, an asset management company, released its Q1 2026 investor letter. A copy of the letter can be downloaded here. In the first quarter of 2026, the stock market declined by -4.33% after three years of gains, initially lifted by strong earnings and expectations of interest rate cuts. However, following military actions in Iran on February 28, rising oil prices, higher interest rates, and heightened economic uncertainty lowered stock prices. Technology, Consumer Discretionary, and Financials were the sectors with the lowest quarterly performance. The top-performing sectors were consumer staples, utilities, and energy. Despite these challenges, Matrix’s portfolios performed relatively well, with the Dividend Income portfolio achieving a small positive return and the LCV portfolio outpacing the S&P 500®. The firm continued its cautious optimism for 2026 and believes the current volatile environment presents significant investment opportunities. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Matrix Asset Advisors highlighted Automatic Data Processing, Inc. (NASDAQ:ADP) as a newly added position. Automatic Data Processing, Inc. (NASDAQ:ADP) is a multinational company that provides cloud-based human capital management solutions. On May 15, 2026, Automatic Data Processing, Inc. (NASDAQ:ADP) closed at $214.48 per share. One-month return of Automatic Data Processing, Inc. (NASDAQ:ADP) was 9.04%, and its shares lost 31.67% over the past 52 weeks. Automatic Data Processing, Inc. (NASDAQ:ADP) has a market capitalization of $88.25 billion.
Matrix Asset Advisors stated the following regarding Automatic Data Processing, Inc. (NASDAQ:ADP) in its Q1 2026 investor letter:
“During the quarter, we started new partial positions in Automatic Data Processing, Inc. (NASDAQ:ADP) and Procter & Gamble. Automatic Data Processing (ADP) is a leader in the business of administering payroll, group health insurance, business insurance, workers’ comp plans, retirement plans, and compliance for large and small businesses. These administrative functions are critical to a business’s operations, and the company has a very high client retention rate. The company’s stock price has declined approximately 30% over the past year on concerns that artificial intelligence will disrupt its business and a slowing labor market. ADP has a long history of increasing earnings and dividends. At our initial purchase price of about $215, the shares were trading at the lower end of their historic P/E multiple, 18x forward earnings, and at the higher end of their dividend yield at 3.2%. ADP has increased its dividend for over 50 consecutive years. We believe the share price will rebound strongly when the company demonstrates that the fears about AI’s disruption to its business are exaggerated.”
Automatic Data Processing, Inc. (NASDAQ:ADP) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 68 hedge fund portfolios held Automatic Data Processing, Inc. (NASDAQ:ADP) at the end of the fourth quarter, up from 57 in the previous quarter. While we acknowledge the risk and potential of Automatic Data Processing, Inc. (NASDAQ:ADP) 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 Automatic Data Processing, Inc. (NASDAQ:ADP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Automatic Data Processing, Inc. (NASDAQ:ADP) and shared the list of best high-yield dividend 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.
