Diamond Hill Capital, a First Eagle Investment Management company, issued its Q2 2026 investor letter for its “Large Cap Strategy”. A copy of the letter is available to download here. The Strategy returned 3.42% net of fees, trailing the Russell 1000 Value Index’s 13.87% gain. Performance benefited from stock selection in consumer staples, materials and consumer discretionary, along with an underweight in utilities. However, stock selection in information technology, health care and industrials detracted from relative performance. AI remained the dominant market theme, driving an 81% gain in technology, while energy declined after the Iran war ended and oil prices fell. The Strategy’s limited exposure to companies benefiting from AI-related capital spending caused most of its underperformance, while software holdings remained pressured by concerns about AI disruption. Despite elevated market valuations, the team continues to find attractive opportunities through bottom-up research and expects active management to support better-than-market returns. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its second-quarter 2026 investor letter, Diamond Hill Capital Large Cap Strategy highlighted Humana Inc. (NYSE:HUM) as a newly added position. Humana Inc. (NYSE:HUM) is an American insurance company that provides medical and specialty insurance products. On July 31, 2026, Humana Inc. (NYSE:HUM) closed at $363.86 per share. The one-month return of Humana Inc. (NYSE:HUM) was -7.38%, and its shares gained 47.10% over the past 52 weeks. Humana Inc. (NYSE:HUM) has a market capitalization of $43.69 billion.
Diamond Hill Capital Large Cap Strategy stated the following regarding Humana Inc. (NYSE:HUM) in its Q2 2026 investor letter:
“Health care services and insurance company Humana Inc. (NYSE:HUM) is a new holding in 2Q26 and the second-largest Medicare Advantage insurer in the US. Shares outperformed in 2Q26 after the company delivered strong 1Q26 results and on better-than expected Medicare rate increases announced in early April, which will be helpful for the industry in closing the gap between pricing and cost trends.
Health care services and insurance company Humana is the second-largest Medicare Advantage insurer in the US. Margins have been squeezed in recent years from rising medical costs and lower government reimbursement; however, we believe margins will normalize upward over time as the company prices to reflect higher utilization and as government reimbursement rates improve. Relative to a more normal earnings base, we believe the valuation is very attractive.”
