Wedgewood Partners, an investment management firm, has published its investor letter for the fourth quarter of 2025. The firm expects increased market volatility in the coming years and has adjusted its outlook accordingly. The Wedgewood Composite returned -1.8% net during the quarter, while the S&P 500 gained 2.7%, the Russell 1000 Growth Index rose 1.1%, and the Russell 1000 Value Index increased 3.8%. For the year to date, the Composite is up 4.3%, compared to 17.9%, 18.6%, and 15.9% for those indexes, respectively.
The letter attributed the underperformance to several factors. Poor stock selection was noted, along with a portfolio containing strong past performers due for valuation corrections. The firm also reported being structurally underweight in AI stocks. Looking ahead to 2026, the letter stated that crowded AI investments and stretched valuations are creating pressure on prudent investment decisions.
In the same letter, Wedgewood Partners discussed Tractor Supply Company (NASDAQ:TSCO), a rural lifestyle retailer in the United States. On January 16, 2026, TSCO stock closed at $51.01 per share. Its one-month return was -1.37%, and it has lost 4.94% of its value over the past 52 weeks. The company has a market capitalization of $26.95 billion.
Regarding Tractor Supply Company, Wedgewood Partners stated: "Tractor Supply Company (NASDAQ:TSCO) also detracted from performance. The Company posted +7% growth in sales and +6% growth in operating income, as management concluded several long-term investments into its stores and distribution infrastructure. Tractor Supply has carved out a defensible niche in rural markets, particularly among higher-income earners, with approximately 80% of its sales derived from customers enrolled in its loyalty program. We expect to see accelerating earnings growth in 2026 as the Company laps its investments in last-mile delivery and direct sales, along with customer spending patterns that should normalize following a few years of abnormal weather."
According to database information, 46 hedge fund portfolios held Tractor Supply Company at the end of the third quarter, up from 41 in the previous quarter. The stock is not included on a list of 30 Most Popular Stocks Among Hedge Funds.