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Hotchkis & Wiley, an investment management company, released its first-quarter 2026 investor letter for the “Hotchkis & Wiley Large Cap Fundamental Value Fund.” A copy of the letter can be downloaded here. In Q1 2026, the S&P 500 Index declined by -4.4%, driven by geopolitical uncertainty and AI investment themes. Brent crude oil surged over 100% due to U.S.-Israel strikes on Iran, benefiting the energy sector, which outperformed significantly. Value stocks surpassed growth, with the Russell 1000 Value Index gaining +2.1% compared to -9.8% for the Growth Index. However, the Hotchkis & Wiley Large Cap Fundamental Value Fund lagged, returning 0.36% vs. 2.10% for the Russell 1000 Value Index, driven by its overweight exposure in software and health insurers. However, the energy holdings, which returned +49%, were the portfolio’s top performers. 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 Large Cap Fundamental Value Fund highlighted stocks such as Elevance Health, Inc. (NYSE:ELV). Elevance Health, Inc. (NYSE:ELV) is a health benefits company that detracted from the Strategy’s performance in the quarter. On April 27, 2026, Elevance Health, Inc. (NYSE:ELV) closed at $356.13 per share. One-month return of Elevance Health, Inc. (NYSE:ELV) was 21.65%, and its shares lost 13.91% over the past 52 weeks. Elevance Health, Inc. (NYSE:ELV) has a market capitalization of $77.34 billion.
Hotchkis & Wiley Large Cap Fundamental Value Fund stated the following regarding Elevance Health, Inc. (NYSE:ELV) in its Q1 2026 investor letter:
“Elevance Health, Inc. (NYSE:ELV) is one of the largest health insurers, yet it trades at a discount to the broader market despite being a high quality business that grows faster than GDP and returns a significant portion of its cash to shareholders. Q1 performance was weak, driven by disappointing FY26 guidance amid declining Medicaid enrollment and flat Medicare reimbursement rates proposed by the Trump administration. We view these pressures as medium-term noise and believe Elevance has the ability to improve margins over time through benefit adjustments and/or higher premiums.”
Elevance Health, Inc. (NYSE:ELV) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 78 hedge fund portfolios held Elevance Health, Inc. (NYSE:ELV) at the end of the fourth quarter, compared to 82 in the previous quarter. While we acknowledge the potential of Elevance Health, Inc. (NYSE:ELV) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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