Diamond Hill Capital, a First Eagle Investment Management company, issued its Q2 2026 investor letter for its “Large Cap Strategy”. A copy of the letter is available to download here. The Strategy returned 3.42% net of fees, trailing the Russell 1000 Value Index’s 13.87% gain. Performance benefited from stock selection in consumer staples, materials and consumer discretionary, along with an underweight in utilities. However, stock selection in information technology, health care and industrials detracted from relative performance. AI remained the dominant market theme, driving an 81% gain in technology, while energy declined after the Iran war ended and oil prices fell. The Strategy’s limited exposure to companies benefiting from AI-related capital spending caused most of its underperformance, while software holdings remained pressured by concerns about AI disruption. Despite elevated market valuations, the team continues to find attractive opportunities through bottom-up research and expects active management to support better-than-market returns. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its second-quarter 2026 investor letter, Diamond Hill Capital Large Cap Strategy highlighted ConocoPhillips (NYSE:COP). ConocoPhillips (NYSE:COP), a US-based energy company that produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids, detracted from the Strategy’s performance during the quarter. On July 31, 2026, ConocoPhillips (NYSE:COP) closed at $120.48 per share, reflecting a market capitalization of $146.78 billion. ConocoPhillips (NYSE:COP) posted a one-month return of 14.52%, while its shares gained 27.75% over the past 52 weeks.
Diamond Hill Capital Large Cap Strategy stated the following regarding ConocoPhillips (NYSE:COP) in its Q2 2026 investor letter:
“Exploration and production company ConocoPhillips (NYSE:COP) saw shares decline after an agreement was reached to end the war between the US and Iran and reopen the Strait of Hormuz. Although the situation in the Middle East remains fragile, the market increasingly viewed the risk of a meaningful supply disruption as diminished, and the war-related risk premium that had supported US exploration and production companies earlier in the year largely dissipated.”
ConocoPhillips (NYSE:COP) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 74 hedge fund portfolios held ConocoPhillips (NYSE:COP) at the end of the first quarter which was 65 in the previous quarter. While we acknowledge the risk and potential of ConocoPhillips (NYSE:COP) 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 ConocoPhillips (NYSE:COP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered ConocoPhillips (NYSE:COP) and shared the list of cheap blue-chip stocks to buy according to Wall Street analysts. 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.
