Sandhill Investment Management, an investment management company, released its second quarter 2026 investor letter. A copy of the letter can be downloaded here. The letter highlighted a strong second quarter for equity markets, with the S&P 500 up about 15% and projected earnings growth at the fastest rate in five years. Despite challenges like tensions with Iran and lower oil prices, the semiconductor sector and AI advancements drove significant stock price increases. In fixed income, rising yields have made corporate bonds appealing, offering over 5% returns. However, consumer sentiment is waning, and the savings rate is at a six-decade low, raising caution about the economy. Investment trends suggest that while overall market valuations are high, quality businesses present selective opportunities for long-term gains amidst short-term volatility. Also, check the fund's top five holdings to see its best picks in 2026.
In its Q2 2026 investor letter, Sandhill Investment Management highlighted Forgent Power Solutions, Inc. (NYSE:FPS) as a new holdings. Forgent Power Solutions, Inc. (NYSE:FPS) is a leading industrial company that designs and manufactures electrical distribution equipment used in data centers, the power grid, and energy-intensive industrial facilities. On August 26, 2026, Forgent Power Solutions, Inc. (NYSE:FPS) closed at $32.21 per share, reflecting a market capitalization of $9.80 billion. Forgent Power Solutions, Inc. (NYSE:FPS) posted a one-month return of -3.22%.
Sandhill Investment Management stated the following regarding Forgent Power Solutions, Inc. (NYSE:FPS) in its Q2 2026 investor letter:
"Despite the elevated broad market valuation and the caution related to the consumer, quality businesses are being valued more cheaply than they have been in a long time, and we are putting capital to work. We remain selective, but individual businesses are presenting compelling value.
We also initiated a position in Forgent Power Solutions, Inc. (NYSE:FPS), a newly public manufacturer of electrical distribution equipment, including transformers, switchgear and prefabricated power systems for data centers and the broader electric grid. As AI infrastructure spending accelerates, power equipment has become a critical constraint on new data center capacity. Forgent's ability to provide an integrated range of electrical products positions it well as customers seek faster and more coordinated solutions. Forgent, by contrast, is a newly public company that remains less widely followed despite strong long-term growth prospects and a valuation that leaves room for upside."

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