Longleaf Partners, managed by Southeastern Asset Management, released its Q4 2025 Small-Cap Fund investor letter. A copy of the letter can be downloaded here. Longleaf experienced several environments throughout his experience in small cap investing. This year, the underlying performance of the Fund’s holdings was more promising than the actual stock price returns compared to the inflation target plus 10% and the unusual performance of the Russell 2000. In the fourth quarter of 2025, the Fund returned 1.13% compared to 2.40% for the Russell 3000 Index and 2.19% for the Russell 2000 Index. The Fund’s annual return was 7.56% compared to 17.15% and 12.81% of the indices, respectively. In 2025, Southeastern demonstrated strong performance in protecting investments during market volatility, emphasizing the value of owning solid, free cash flow-generating companies rather than speculative fads. Also, check out the Fund’s top five holdings to learn your best picks in 2025.
In its Q4 2025 investor letter, Longleaf Partners Small-Cap Fund highlighted stocks like Graham Holdings Company (NYSE:GHC). Graham Holdings Company (NYSE:GHC) is a diversified holding company that operates in several segments, including education, television broadcasting, and healthcare. Graham Holdings Company (NYSE:GHC)’s monthly performance was -6.58% and its shares gained 9.76% of its value in the past 52 weeks. On February 24, 2026, Graham Holdings Company (NYSE:GHC) stock closed at $1,067.83 per share, with a market capitalization of $4.658 million.
Longleaf Partners Small-Cap Fund stated the following regarding Graham Holdings Company (NYSE:GHC) in its Q4 2025 investor letter:
“Graham Holdings Company (NYSE:GHC) – Diversified conglomerate GHC had a solid performance throughout the year. The company’s Kaplan education segment has multiple subparts that have finally returned to growth together after a multi-year turnaround bore fruit. Encouragingly, mergers and acquisitions in broadcast television have increased this year, which could provide GHC with a unique opportunity to grow and realize its value in this segment. The healthcare segment continued its strong growth and appears to be undergoing a leadership change well. Overall, GHC remains on the offensive with its strong net cash balance and overfunded pension. Our Q/S Podcast with CEO Tim O’Shaughnessy from earlier this year is still a good option if you want to learn more about the company.”
Graham Holdings Company (NYSE:GHC) isn’t on our list of the 30 most popular stocks among hedge funds. According to our database, 27 hedge fund portfolios owned Graham Holdings Company (NYSE:GHC) at the end of the fourth quarter, up from 23 in the previous quarter. While we recognize the potential of Graham Holdings Company (NYSE:GHC) 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’s also benefiting significantly from Trump-era tariffs and the offshoring trend, check out our free report on best short-term AI stock.