Diamond Hill Capital, an investment management company, released its “Mid Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fourth quarter posted another period of favorable gains for equity markets, with small and large cap positions being stronger performers, returning 2.19% and 2.41%. While the mid-cap range was a relative laggard, with the Russell Mid Cap Index returning 0.16%. The Strategy returned 3.65% (net) in Q4, compared to 0.16% return for the Russell Midcap Index. YTD, the strategy returned 13.47%, outperforming the 10.60% return for the Index. In 2025, AI-related spending remained a key driver in equity markets, though December saw a pause as investors became more cautious about AI developments and potential market bubbles. Given the elevated valuation in the equity market, the Strategy is well-positioned for ongoing levels of heightened uncertainty going forward. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Diamond Hill Mid Strategy highlighted stocks like Zoetis Inc. (NYSE:ZTS). Zoetis Inc. (NYSE:ZTS) is an animal health company focused on animal health medications, vaccines, and diagnostic products. On March 17, 2026, Zoetis Inc. (NYSE:ZTS) stock closed at $121.68 per share. Zoetis Inc. (NYSE:ZTS) delivered a -5.77% return in the past month, and its shares lost 25.69% over the past twelve months. Zoetis Inc. (NYSE:ZTS) has a market capitalization of about $53.624 billion.
Diamond Hill Mid Strategy stated the following regarding Zoetis Inc. (NYSE:ZTS) in its fourth quarter 2025 investor letter:
“Zoetis Inc. (NYSE:ZTS) is a leader in the animal health market with leading products for companion animals (pets) and livestock. The company has a broad portfolio with multiple growth drivers and a strong pipeline to address several undertreated pet conditions. Concerns about one of its arthritis drugs used in dogs have pressured the share price recently, allowing us to introduce a position below our estimate of intrinsic value.”
Zoetis Inc. (NYSE:ZTS) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 69 hedge fund portfolios held Zoetis Inc. (NYSE:ZTS) at the end of the fourth quarter, up from 72 in the previous quarter. While we acknowledge the risk and potential of Zoetis Inc. (NYSE:ZTS) 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 Zoetis Inc. (NYSE:ZTS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Zoetis Inc. (NYSE:ZTS) and shared Jensen Quality Growth Equity Strategy’s views on the company. 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.
