In the fourth quarter of 2025, The London Company's Mid Cap portfolio demonstrated strong performance, achieving a 3.2% return (3.0% net), significantly exceeding the Russell Midcap Index's modest 0.2% increase. This notable outperformance was primarily fueled by strategic stock selections and favorable sector exposure. Several key holdings contributed to this success, showcasing the portfolio's resilience and strategic positioning in a dynamic market environment.
Dollar Tree, Inc. emerged as a top performer within the portfolio, experiencing a significant boost following the successful divestiture of its Family Dollar business. This strategic move eliminated a long-standing drag on the company's growth trajectory, allowing for improved financial performance and investor confidence. The market responded positively to this development, reflecting optimism about Dollar Tree's streamlined operations and future prospects.
AerCap Holdings also delivered a strong performance throughout the year, with solid quarterly results bolstering its shares. As a global leader in aircraft leasing, AerCap's extensive portfolio of aircraft positioned it advantageously in the recovering aviation sector, contributing to its robust returns. Meanwhile, Churchill Downs Inc. outperformed expectations, driven by strong growth from its Historical Racing Machine (HRM) facilities and increasing optimism surrounding its outlook for 2026. The company's diversified revenue streams and strategic investments in entertainment and gaming proved to be key drivers of its success.
Another significant contributor to the portfolio's positive results was Cooper Companies, a global medical device firm. Cooper Companies operates two primary divisions: CooperVision, focusing on contact lenses, and CooperSurgical, specializing in women's healthcare products. Both divisions demonstrated solid growth, underscoring the company's strong market position and the resilient demand for its innovative medical solutions. These individual successes collectively propelled The London Company's Mid Cap portfolio to outperform its benchmark, highlighting the effectiveness of its investment strategy.
The London Company’s Mid Cap portfolio significantly surpassed market benchmarks in the fourth quarter of 2025, with returns driven by successful divestitures and robust growth across key holdings. Both strategic stock selection and favorable sector positioning played crucial roles in achieving this superior performance.