Diamond Hill Capital, an investment management company, recently released its “Mid Cap Strategy” third-quarter 2025 investor letter. The letter can be downloaded from their website for further details. In the third quarter of 2025, the market experienced a rally, with US stocks gaining over 8% according to the Russell 3000 Index. Small-cap stocks performed the best, with a more than 12% increase, while large-cap stocks saw an 8% increase and mid-cap stocks had a 5% gain. However, the strategy underperformed the Russell Midcap Index, returning 4.49% net compared to the Index’s 5.33%.
In their investor letter, Diamond Hill Capital highlighted Freeport-McMoRan Inc. (NYSE:FCX) as one of their top picks. Freeport-McMoRan is a mining company with a one-month return of 19.64% and a 35.01% increase in share value over the last 52 weeks. As of December 30, 2025, their stock closed at $51.41 per share, with a market capitalization of $73.821 billion.
The investor letter mentioned that Freeport-McMoRan experienced a significant mudslide in early September at its Grasberg Block Caves mine in Indonesia, resulting in the tragic loss of seven workers. The company is still evaluating the extent of the damage and the timeline for repairs, but it is expected that production will be impacted in the third quarter. The best-case scenario indicates that production will ramp back up throughout 2026 and return to pre-incident levels by 2027.
Despite these challenges, Freeport-McMoRan Inc. (NYSE:FCX) remains a promising investment option. While it is not among the 30 most popular stocks among hedge funds, 83 hedge fund portfolios still held shares of the company at the end of the third quarter. However, some AI stocks are believed to offer greater upside potential with lower downside risk. For investors seeking undervalued AI stocks that could benefit from current economic trends, exploring other investment options may be beneficial.
In conclusion, Diamond Hill Capital’s Mid Cap Strategy continues to navigate the market landscape with a focus on potential growth opportunities. While Freeport-McMoRan Inc. faces challenges in the short term, its long-term prospects remain positive. Investors are encouraged to conduct their research and consider all available options before making investment decisions.
