Hotchkis & Wiley, an investment management company, released its “Hotchkis & Wiley Mid-Cap Value Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter of 2025, equity markets posted strong gains with the S&P 500 Index, Nasdaq Composite, Dow Jones Industrial Average, and Russell 2000 Index hitting all-time highs. Enthusiasm over artificial intelligence (AI), a long-awaited Federal Reserve rate cut, and stronger-than-expected corporate earnings supported the investor sentiments in the quarter. The fund outperformed the Russell Midcap Value Index in the third quarter, gaining 7.74% vs 6.18% for the index. Please review the fund’s top 5 holdings to gain insight into their key selections for 2025.
In its third-quarter 2025 investor letter, Hotchkis & Wiley Mid-Cap Value Fund highlighted stocks such as Centene Corporation (NYSE:CNC). Centene Corporation (NYSE:CNC) is a healthcare enterprise that offers services to under-insured and uninsured families and commercial organizations. The one-month return of Centene Corporation (NYSE:CNC) was 5.19%, and its shares lost 33.08% of their value over the last 52 weeks. On December 09, 2025, Centene Corporation (NYSE:CNC) stock closed at $38.08 per share, with a market capitalization of $18.717 billion.
Hotchkis & Wiley Mid-Cap Value Fund stated the following regarding Centene Corporation (NYSE:CNC) in its third quarter 2025 investor letter:
“Centene Corporation (NYSE:CNC) is a managed care organization focused on the managed Medicaid market, with ~28 million at-risk health insurance enrollees. CNC shares fell during the quarter following its most recent quarterly earnings report that was worse than expected. At ~4.8x normal earnings, we believe CNC is attractive as the clear market leader in a business in which scale is a significant competitive advantage. The Medicaid market should grow faster than the economy as a whole: CMS forecasts Medicaid spending to grow 6% per year 2020-2027, driven by spending per member growth. Centene can grow with minimal requirements for invested capital.”
Centene Corporation (NYSE:CNC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held Centene Corporation (NYSE:CNC) at the end of the third quarter, which was 59 in the previous quarter. While we acknowledge the potential of Centene Corporation (NYSE:CNC) 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.
