Hotchkis & Wiley, an investment management company, released its first-quarter 2026 investor letter for the “Hotchkis & Wiley Mid-Cap Value Fund.” A copy of the letter can be downloaded here. In the first quarter, geopolitical instability and AI-focused investments were the key market drivers. The energy sector significantly benefited from the Brent crude oil surge due to U.S.-Israel strikes on Iran. The Hotchkis & Wiley Mid-Cap Value Fund outperformed the Russell Midcap Value Index, mainly due to strong stock selection in energy, which returned 79% compared to 37% for the index. The Fund delivered a return of 6.74% in Q1 Vs. 3.68% return for the index. While stock selection in technology, healthcare, and consumer discretionary negatively impacted overall performance. The firm remains focused on its disciplined and long-term investment approach. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Hotchkis & Wiley Mid-Cap Value Fund highlighted stocks like WPP plc (NYSE:WPP). Based in London, the United Kingdom, WPP plc (NYSE:WPP) is a leading communication, advertising, commerce, and technology services company. On April 23, 2026, WPP plc (NYSE:WPP) closed at $17.77 per share. One-month return of WPP plc (NYSE:WPP) was 14.84%, and its shares lost 52.52% over the past 52 weeks. WPP plc (NYSE:WPP) has a market capitalization of $3.83 billion.
Hotchkis & Wiley Mid-Cap Value Fund stated the following regarding WPP plc (NYSE:WPP) in its Q1 2026 investor letter:
“WPP plc (NYSE:WPP) was the world’s largest ad agency holding company before its disastrous 2025 performance and the Omnicom-IPG merger, with operations across creative services (45%), media services (40%), and public relations. We own WPP for its attractive valuation and good balance sheet, believing the company can deliver positive returns as margins expand from 12.5% to normalized 16% levels. WPP shares fell to near their lowest level since 1998 as the company reported weak results driven by client assignment losses and reduced client spending. After issuing a weak sales outlook in early 2025 then cutting that outlook in Q2 and again in Q3, the company fired its CEO of 7 years with a new CEO who started in early September. Despite weak near-term outlook, WPP reported net new business wins in Q4 2025 with momentum continuing into early 2026. The company has a good balance sheet and is trading at a very low multiple of consensus earnings, which we believe are depressed.”
WPP plc (NYSE:WPP) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 8 hedge fund portfolios held WPP plc (NYSE:WPP) at the end of the fourth quarter, compared to 11 in the previous quarter. While we acknowledge the risk and potential of WPP plc (NYSE:WPP) 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 WPP plc (NYSE:WPP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered WPP plc (NYSE:WPP) and shared the list of best affordable 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.
