MD Sass, a boutique **** et management firm, published its second-quarter investor update for its flagship, the "MD Sass Concentrated Value Strategy." The letter can be downloaded here. In the first half of 2026, AI infrastructure stocks led the market, with the Russell 1000 Value increasing by 16.3%, outpacing the S&P 500 (10.2%) and Russell 1000 Growth (5.3%). This growth was fueled by semiconductor, memory, and hardware companies benefiting from AI development, even though they are considered cyclical. These sectors, representing only 7.7% of the Russell 1000 Value at the start of the year, contributed nearly 70% of its returns. The portfolio gained 10.0% in the second quarter, net of fees, compared to 13.9% for the Russell 1000 Value Index. Year-to-date, the strategy returned 6.6%, net of fees, versus 16.3% for the Index. The portfolio faced challenges due to limited exposure to companies with the greatest upside from AI infrastructure investments. It also lacked exposure to the Energy sector, which returned about 20% in the first half amid geopolitical tensions with Iran that increased commodity prices, affecting performance. The firm recognizes the importance of adapting its strategies while maintaining core investment principles as it explores future opportunities in emerging technological themes. Also, check the fund's top five holdings to see its best picks in 2026.
In its second-quarter 2026 investor letter, MD Sass Concentrated Value Strategy highlighted Primo Brands Corporation (NYSE:PRMB) as a notable contributor. Primo Brands Corporation (NYSE:PRMB) operates as a branded beverage company in North America. On August 28, 2026, Primo Brands Corporation (NYSE:PRMB) closed at $23.00 per share. Over the past month, Primo Brands Corporation (NYSE:PRMB) returned 3.00%, while its shares have declined 8.40% in the last 52 weeks. Primo Brands Corporation (NYSE:PRMB) has a market capitalization of $8.32 billion, and its stock has traded within a 52-week range of $14.36 to $26.21.
MD Sass Concentrated Value Strategy stated the following regarding Primo Brands Corporation (NYSE:PRMB) in its Q2 2026 investor letter:
"The largest positive contributors to performance in Q2 were Primo Brands Corporation (NYSE:PRMB), Micron Technology (MU), and Henry Schein (HSIC), which collectively contributed approximately 382 bps. PRMB, a leading North American branded water company with a significant retail and home and office delivery business, declined 23% from its March 3 year-to-date peak amid concerns about commodity inflation following the onset of the conflict in Iran. Prices for plastic resins and other oil-related inputs rose sharply from the end of February through mid-April, raising concerns that PRMB would need to cut guidance given its exposure to PET resin and other packaging costs. The company's May 7 financial results and earnings call provided a big sigh of relief. Management explained that a combination of hedging, forward purchase agreements