The London Company, an investment management company, released its second-quarter 2026 investor letter for its "Small-Mid Cap Strategy." The letter can be downloaded here. U.S. equities rebounded sharply in Q2, with the Russell 3000 gaining 15.4%, supported by AI infrastructure spending, strong earnings, and easing Middle East tensions. Technology led the rally as semiconductors recovered, while Energy and defensive sectors lagged. The portfolio returned 12.1% gross and 11.8% net compared with a 20.3% gain in the Russell 2500 Index. Stock selection weighed on relative performance, as high-beta and high-volatility stocks dominated returns while Quality remained weak, although results improved in June as market participation broadened. Looking ahead, resilient earnings and AI productivity support a constructive outlook, but negative hyperscaler cash flow, sticky inflation, geopolitical risks, index concentration, and elevated valuations warrant caution. The strategy continues to emphasize quality, downside protection, and active management. Additionally, reviewing the Fund's top five holdings could also highlight its best ideas for 2026.
In its second-quarter 2026 investor letter, London Company SMID Cap Strategy highlighted Entegris, Inc. (NASDAQ:ENTG) as a leading contributor. Headquartered in Billerica, Massachusetts, Entegris, Inc. (NASDAQ:ENTG) provides materials and process solutions for the semiconductor and other high-technology industries. On August 26, 2026, Entegris, Inc. (NASDAQ:ENTG) closed at $142.46 per share, reflecting a market capitalization of $21.77 billion. Entegris, Inc. (NASDAQ:ENTG) posted a one‑month return of 22.74%, while its shares gained 71.40% over the past 52 weeks.
London Company SMID Cap Strategy stated the following regarding Entegris, Inc. (NASDAQ:ENTG) in its Q2 2026 investor letter:
"Entegris, Inc. (NASDAQ:ENTG) was a top contributor, benefiting from improving semiconductor demand, accelerating AI investment, and rising fab utilization. Beyond the industry recovery, management outlined a clear path to structurally higher earnings through manufacturing optimization, improved working capital, and rebuilding the operating model over time. We remain attracted to ENTG's strong competitive position, high barriers to entry, and long runway for free cash flow expansion."
Entegris, Inc. (NASDAQ:ENTG) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held Entegris, Inc. (NASDAQ:ENTG) at the end of the second quarter, the same as in the previous quarter. While we acknowledge the potential of Entegris, Inc. (NASDAQ:ENTG) 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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