Wedgewood Partners, an investment management firm, has issued its investor letter for the fourth quarter of 2025. The company expects increased market volatility in the years ahead and has adjusted its outlook accordingly. The Wedgewood Composite recorded a net return of -1.8% in the fourth quarter, while the S&P 500 returned 2.7%, the Russell 1000 Growth Index 1.1%, and the Russell 1000 Value Index 3.8%. Year-to-date, the Composite gained 4.3%, compared to 17.9%, 18.6%, and 15.9% for those indexes, respectively.
Historically, the firm's strategy of focusing on high-quality stocks has been effective since 1992, but not in 2025. The letter attributed the recent underperformance to poor stock selection, valuation corrections for past strong performers in the portfolio, and a structural underweight position in AI stocks. It noted that crowded AI investments and stretched valuations in 2026 are likely to pressure prudent investment decisions.
In the letter, Wedgewood Partners mentioned Old Dominion Freight Line, Inc. (NASDAQ:ODFL) as one of its holdings. Old Dominion Freight Line is a less-than-truckload motor carrier offering regional, inter-regional, and national services, including expedited transportation. On January 16, 2026, its stock closed at $175.68 per share. Over the past month, the stock returned 10.26%, but it lost 7.33% of its value over the last 52 weeks. The company has a market capitalization of $36.922 billion.
Regarding Old Dominion Freight Line, Wedgewood Partners stated: "Old Dominion Freight Line, Inc. (NASDAQ:ODFL) contributed to performance as investors rotated into more economically sensitive sectors late in the year. After favoring technology and particularly AI focused investments for most of the year, investors became more optimistic about the possibility of a rebound in industrial activity, a core source of demand for Old Dominion's fleet. We added to positions before the rally as we expect the Company will continue to manage its capacity exceptionally well, keeping costs under control and taking price as it provides dependable service for its tariff-addled customers. We do not know how to time economic cycles, but we do know how to identify great businesses that should take profit share regardless of the macroeconomic backdrop. Over time, we expect the market to eventually reward those best-in-class businesses such as Old Dominion."
According to database records, 44 hedge fund portfolios held Old Dominion Freight Line at the end of the second quarter, down from 51 in the previous quarter. In the third quarter of 2025, the company reported revenue of $1.41 billion, a 4.3% decline from the previous year.