Investor Concerns Impacted Labcorp (LH) in Q4

Diamond Hill Capital, an investment management company, released its “Large Cap Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets continued their upward momentum in Q4, with the Russell 1000 Value Index increasing 3.8%. The information technology (+11%) and communication services (+9%) sectors are leading the rally, driven by AI optimism. The growth areas of the market accounted for the majority of the Index’s return in Q4. The firm maintains a cautious stance toward AI-driven market enthusiasm and believes that, fundamentally stable, high-quality, cash-generative businesses present attractive opportunities. Against this backdrop, the Fund returned 1.41% in the quarter, lagging the Russell 1000 Value Index’s 3.8% return. In addition, you can check the Fund's top five holdings to see its best picks for 2025.

In its fourth-quarter 2025 investor letter, Diamond Hill Large Cap Fund highlighted Labcorp Holdings Inc. (NYSE:LH) as one of the leading performance detractors. Labcorp Holdings Inc. (NYSE:LH) is a laboratory services company that operates through the Diagnostics Laboratories and Biopharma Laboratory Services segments. The one-month return of Labcorp Holdings Inc. (NYSE:LH) was 3.80%, and its shares gained 9.58% of their value over the last 52 weeks. On February 2, 2026, Labcorp Holdings Inc. (NYSE:LH) stock closed at $270.29 per share with a market capitalization of $22.461 billion.

Diamond Hill Large Cap Fund stated the following regarding Labcorp Holdings Inc. (NYSE:LH) in its fourth quarter 2025 investor letter:

"Shares of leading diagnostic lab Labcorp Holdings Inc. (NYSE:LH) declined amid investor concern surrounding lower-than-expected guidance, driven by delays in acquisition closings and weakness in its development pipeline, leading to a restructuring of that business. However, we maintain our conviction in the company’s competitive advantages in the diagnostic space, as the company’s scale allows it to be a low-cost provider with better-than-average margins."

Labcorp Holdings Inc. (NYSE:LH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 47 hedge fund portfolios held Labcorp Holdings Inc. (NYSE:LH) at the end of the third quarter, up from 42 in the previous quarter. While we acknowledge the potential of Labcorp Holdings Inc. (NYSE:LH) 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 addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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