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 White Mountains Insurance Group, Ltd. (NYSE:WTM). Headquartered in Hamilton, Bermuda, White Mountains Insurance Group, Ltd. (NYSE:WTM) is an insurance and other financial services provider. On August 26, 2026, White Mountains Insurance Group, Ltd. (NYSE:WTM) closed at $2,132.74 per share. Over the past month, White Mountains Insurance Group, Ltd. (NYSE:WTM) returned 0.39%, while its shares have gained 16.52% in the last 52 weeks. White Mountains Insurance Group, Ltd. (NYSE:WTM) has a market capitalization of $5.09 billion.
London Company SMID Cap Strategy stated the following regarding White Mountains Insurance Group, Ltd. (NYSE:WTM) in its Q2 2026 investor letter:
"White Mountains Insurance Group, Ltd. (NYSE:WTM) lagged during an otherwise uneventful quarter following strong prior period performance driven by the Bamboo transaction. The shares also benefited less from the broader market rebound after proving relatively defensive earlier in the year. We remain confident in management's disciplined capital allocation and ability to compound book value per share over the long term."
White Mountains Insurance Group, Ltd. (NYSE:WTM) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held White Mountains Insurance Group, Ltd. (NYSE:WTM) at the end of the second quarter which was 22 in the previous quarter. While we acknowledge the potential of White Mountains Insurance Group, Ltd. (NYSE:WTM) 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