Automatic Data Processing, Inc. (ADP) Fell Due to Weakness in the US Job Market

Fundsmith, an investment management firm based in London, has released its annual 2025 investor letter for its “Fundsmith Equity Fund.” A copy of the letter can be downloaded here. The fund focuses on investing in equities globally. The T Class Accumulation shares where the firm invested returned 0.8% in 2025, compared to 12.8% for the MSCI World Index (‘Index’) in sterling with dividends reinvested. Since its inception, the fund has returned 1.7% p.a. more than the index. The fund attributed its underperformance during 2025 to index concentration, the growth of assets in Index Funds, and weakness in the dollar. In addition, please check the fund’s top five holdings to know its best picks in 2025.

 In its fourth-quarter 2025 investor letter, Fundsmith Equity Fund highlighted stocks such as Automatic Data Processing, Inc. (NASDAQ:ADP). Automatic Data Processing, Inc. (NASDAQ:ADP) is a leading technology company that offers HCM solutions. On January 9, 2026, Automatic Data Processing, Inc. (NASDAQ:ADP) stock closed at $266.02 per share. One-month return of Automatic Data Processing, Inc. (NASDAQ:ADP) was -0.03%, and its shares lost 7.26% of their value over the last 52 weeks. Automatic Data Processing, Inc. (NASDAQ:ADP) has a market capitalization of $107.762 billion.

Fundsmith Equity Fund stated the following regarding Automatic Data Processing, Inc. (NASDAQ:ADP) in its fourth quarter 2025 investor letter:

"Automatic Data Processing, Inc. (NASDAQ:ADP) as a provider of payroll and HR software has suffered from weakness in the US jobs market. In view of the outlook for this core market we hope — with some nervousness — that the guidance management has given on future revenues is conservative. Not because we rely on it, but the market does."

Automatic Data Processing, Inc. (NASDAQ:ADP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 57 hedge fund portfolios held Automatic Data Processing, Inc. (NASDAQ:ADP) at the end of the third quarter, compared to 61 in the previous quarter. While we acknowledge the potential of Automatic Data Processing, Inc. (NASDAQ:ADP) 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.

In another article, we covered Automatic Data Processing, Inc. (NASDAQ:ADP) and shared the list of best dividend aristocrat stocks to invest in. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.