Here's How YCG's Strategy of Buying Cyclically Unprofitable Stock, Apple (AAPL), Has Paid Off

YCG LLC, an asset management firm, released its fourth quarter 2025 investor letter. A copy of the letter can be downloaded here.  In the quarter, the S&P 500 Index returned 2.66%, and the S&P Global Broad Market Index returned 3.22%. The global stock market currently favors speculation and high-risk investor behavior, driven by a concentration of AI-themed stocks, a trend in which unprofitable companies outperform profitable ones, a decline in high-quality stocks, a momentum-driven market, and alpha generation from heavily shorted stocks. As long-term investors, the portfolio consists of dominant and resilient high-quality stocks.  High-quality companies have historically recovered strongly after sharp relative downturns, supporting the firm’s patience. The firm strongly believes its focus on high-quality companies with periodic, opportunistic rebalancing, built on lasting behavioral advantages, is expected to provide good risk-adjusted returns in the long run. Please review the firm’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, YCG Investments highlighted stocks such as Apple Inc. (NASDAQ:AAPL). Apple Inc. (NASDAQ:AAPL) is an American multinational company that designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories. The one-month return of Apple Inc. (NASDAQ:AAPL) was -6.25%, and its shares gained 13.18% of their value over the last 52 weeks. On March 06, 2026, Apple Inc. (NASDAQ:AAPL) stock closed at $257.46 per share, with a market capitalization of $3.79 trillion.

YCG Investments stated the following regarding Apple Inc. (NASDAQ:AAPL) in its fourth quarter 2025 investor letter:

"This playbook of buying more of what is cyclically not working has paid off many times in the past, with the most recent example being our trimming during the April tariff sell off of Verisk (a defensive name that was up year-to-date at the time) to buy Apple Inc. (NASDAQ:AAPL) Inc. (a great business in which we had long-term confidence that was down sharply on tariff fears). Fast forwarding to this past quarter, Apple was now up for the year while Verisk was down substantially. This reversal occurred despite, in our opinion, no significant change to their long-term prospects. Therefore, we took advantage of the volatility again, trimming Apple and buying more Verisk."

Apple Inc. (NASDAQ:AAPL) is in 10th position on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 169 hedge fund portfolios held Apple Inc. (NASDAQ:AAPL) at the end of the fourth quarter, up from 166 in the previous quarter. While we acknowledge the potential of Apple Inc. (NASDAQ:AAPL) 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 Apple Inc. (NASDAQ:AAPL) and shared a list of stocks Jim Cramer discussed. 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.