Wedgewood Partners, an investment management company, released its fourth-quarter 2025 investor letter. The firm anticipates stronger market volatility in the coming years and has moderated its enthusiasm. A copy of the letter can be downloaded here. The Wedgewood Composite returned -1.8% (net) in the fourth quarter compared to the S&P 500’s 2.7%, the Russell 1000 Growth Index’s 1.1%, and the Russell 1000 Value Index’s 3.8% returns. YTD, the Composite gained 4.3% compared to 17.9%, 18.6%, and 15.9% returns for the indexes, respectively. Wedgewood Partners’ focus on high-quality stocks has historically worked since 1992, but not in 2025. The letter highlighted poor stock selection, the portfolio’s strong past performers due for valuation correction, and being structurally underweight in AI stocks drove the underperformance. The letter noted that in 2026, crowded AI investments and stretched valuations create pressure on prudent investment decisions. In addition, you can check the Fund’s top 5 holdings to determine its best picks for 2025.
In its fourth-quarter 2025 investor letter, Wedgewood Partners highlighted stocks such as Tractor Supply Company (NASDAQ:TSCO). Tractor Supply Company (NASDAQ:TSCO) is a rural lifestyle retailer in the United States. On January 16, 2026, Tractor Supply Company (NASDAQ:TSCO) stock closed at $51.01 per share. One-month return of Tractor Supply Company (NASDAQ:TSCO) was -1.37%, and its shares lost 4.94% of their value over the last 52 weeks. Tractor Supply Company (NASDAQ:TSCO) has a market capitalization of $26.95 billion.
Wedgewood Partners stated the following regarding Tractor Supply Company (NASDAQ:TSCO) in its fourth quarter 2025 investor letter:
“Tractor Supply Company (NASDAQ:TSCO) also detracted from performance. The Company posted +7% growth in sales and +6% growth in operating income, as management concluded several long-term investments into its stores and distribution infrastructure. Tractor Supply has carved out a defensible niche in rural markets, particularly among higher-income earners, with approximately 80% of its sales derived from customers enrolled in its loyalty program. We expect to see accelerating earnings growth in 2026 as the Company laps its investments in inal-mile delivery and direct sales, along with customer spending patterns that should normalize following a few years of abnormal weather.”
Tractor Supply Company (NASDAQ:TSCO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 46 hedge fund portfolios held Tractor Supply Company (NASDAQ:TSCO) at the end of the third quarter, up from 41 in the previous quarter. While we acknowledge the potential of Tractor Supply Company (NASDAQ:TSCO) 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.
