| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 8.0% | 2.0% | 15.2% |
| 2025 | 2024 |
|---|---|
| 15.2% | 11.3% |
Auxier Focus Fund returned 2.00% in Q4 2025 and 15.22% for the full year, slightly underperforming the S&P 500's 17.88% annual return. The manager emphasizes a shift toward undervalued, high-quality companies with strong free cash flow yields, particularly benefiting from healthcare's 11.25% catch-up return in Q4. Key contributors included larger banks like Bank of New York and Citigroup benefiting from steepening yield curves, and AI infrastructure plays like Corning and Caterpillar. British American Tobacco gained 63.4% while Alphabet returned 64% on superior business model execution. However, significant risks emerge from record $1.23 trillion margin debt, unpredictable policy shifts, and potential AI overinvestment paralleling the dot-com era. The fund maintains 95% equity exposure with focus on companies demonstrating strong fundamentals at attractive valuations. Looking ahead, corporate earnings appear promising for 2026 with mid-teens growth projected, though the manager emphasizes discipline and downside risk management over speculation.
Focus on undervalued, high-quality companies with strong free cash flow yields while avoiding permanent capital loss through disciplined capital allocation and fundamental analysis.
Corporate earnings look promising for 2026 with JPMorgan projecting earnings growth in the mid-teens. Productivity gains from AI could enhance profit margins. However, the manager emphasizes focusing on underlying business fundamentals as earnings and cash flow will ultimately drive stock prices, while maintaining a healthy respect for downside risk.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 8 2026 | 2025 Q4 | BK, BRK-A, BTI, C, CAT, CVX, FI, GE, GLW, GOOGL, HD, LOW, MSFT, MU, NOW, PH, QCOM, RTX, UNH, VLO | AI, Banking, Buybacks, defense, energy, healthcare, technology, value | - | Technology hyperscalers spent close to $400 billion in 2025 on AI infrastructure with potential to reach $527 billion in 2026. However, an MIT study found… |
| Nov 13 2025 | 2025 Q3 | - | AI, Cloud, DataCenters, megacaps, semiconductors | - | AI-driven capital investment significantly boosted US GDP and equity markets, with tech giants expanding cloud and data-center infrastructure. The letter notes parallels to prior tech… |
| Aug 5 2025 | 2025 Q2 | - | Discipline, downside protection, Margin Of Safety, Patience, valuation | GOOGL | The letter reiterates a conservative, valuation-driven approach focused on downside protection in a market characterized by elevated expectations. Management stresses patience, margin of safety, and… |
| Mar 31 2025 | 2025 Q1 | - | - | - | - |
| Dec 31 2024 | 2024 Q4 | - | - | - | - |
| Sep 30 2024 | 2024 Q3 | - | - | - | - |
| Jul 31 2024 | 2024 Q2 | - | - | - | - |
| May 23 2024 | 2024 Q1 | - | - | - | - |
| Dec 31 2023 | 2023 Q4 | - | - | - | - |
| Nov 16 2023 | 2023 Q3 | 5425 TT | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has become a dominant theme across major equity indices, with Nvidia leading the S&P 500, ASML dominating MSCI EAFE, and TSMC leading emerging markets. The fund benefited from AI-related dynamics, particularly through Samsung's memory products experiencing substantial price increases due to DRAM shortages driven by AI demand. |
Semiconductors Memory DRAM Technology Nvidia |
BuybacksMultiple portfolio companies engaged in significant share repurchases including Mattel ($600M), Regeneron, MGM (40% over 5 years), and PVH. Manager views buybacks as value-creating at current discounted prices. |
Share Repurchase Capital Allocation Value Creation Discount | |
Capital MarketsThe IPO market continued to thaw into year-end, reinforcing that capital formation is re-accelerating after a multi-year slowdown. This backdrop remains supportive for SPAC issuance and transaction activity. The manager believes SPACs only work in a healthy capital markets backdrop with strong performance from IPOs, direct listings, and M&A. |
IPO market Capital formation Direct listings M&A activity Market reopening | |
Defense SpendingCanada announced significant defense spending increases to reach 2% NATO target in 2026 and 5% of GDP by 2035, representing a potential sea change in investment levels. This shift from past decade of neglecting NATO spending requirements creates substantial infrastructure investment opportunities. |
NATO Military Infrastructure Budget Equipment | |
ValueBlue Tower focuses on value investing with international diversification. The manager notes that the valuation spread between cheap and expensive stocks is one of the greatest in market history, creating a favorable environment for their value-oriented approach. |
Value International Cheap Expensive Valuation | |
| 2025 Q3 |
AIAI has become a dominant theme across major equity indices, with Nvidia leading the S&P 500, ASML dominating MSCI EAFE, and TSMC leading emerging markets. The fund benefited from AI-related dynamics, particularly through Samsung's memory products experiencing substantial price increases due to DRAM shortages driven by AI demand. |
Semiconductors Memory DRAM Technology Nvidia |
| 2025 Q2 |
Discipline |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Aug 5, 2025 | Fund Letters | Jeff Auxier | GOOGL | Alphabet, Inc. | Communication Services | Interactive Media & Services | Bull | NASDAQ | advertising, AI, cloud, Platforms, Regulation, Search, Video | Login |
| TICKER | COMMENTARY |
|---|---|
| BK | Bank of New York Mellon, the largest financial custodian in the world, advanced amid strong earnings results. America's oldest bank is an early leader in the adoption of AI, with a multiyear partnership with OpenAI. |
| BRK-A | Brookfield Corp., a leading investor and manager of real assets globally announcing the acquisition of the remaining 26% of Oaktree Capital in conjunction with an affiliate (Brookfield Asset Management). In addition, the company (i) announced that certain subsidiaries entered an $80 billion strategic partnership with the U.S. government to build a new fleet of nuclear factories and (ii) indicated that it intends to recapitalize its Center Parcs hospitality platform for nearly $6 billion, surfacing value on both fronts. |
| BTI | Foreign based British American Tobacco p.l.c. started the year left for dead, priced at 7x earnings and a dividend of over 8%. Sales and earnings grew, the P/E expanded to 11 and the stock gained 63.4% for the year. |
| C | Money center bank Citigroup rose amid strong capital markets activity and benign credit conditions. The company continued to repurchase stock and return capital to shareholders, while expenses related to its transformation are expected to decline next year. |
| CAT | By way of comparison, well-known industrial company Caterpillar has a historical capex-to-revenue of ~5%. |
| CVX | In October, we trimmed Chevron (CVX) following the close of its Hess (HES) acquisition. Chevron now derives significant earnings from a Kazakhstani oilfield whose sole link to the market is a 1,000 mile pipeline through Russia—not a risk we want in this portfolio. |
| FI | Fiserv was a material detractor in the quarter. This is a company that we have discussed extensively over the past few years as we owned it successfully from 2023 until 1Q 2025. However, last quarter was a different story. On the 3Q 2025 earnings call, the new CEO and CFO unwound the former team's guidance for the year. They also explained that the team uncovered aggressive tactics used to boost short-term revenue at the expense of long-term customer relationships and, therefore, earnings. As such, management explained that it would be temporarily backing off of the steady organic revenue compounding, earnings margin expansion, and free cash flow generation that investors had grown accustomed to in order to reinvest in the business and reposition Fiserv for higher quality, long-term growth through entrenched customer relationships. While this news was unexpected, we agree that this course of action is in the best interests of the business based on what we've learned. Despite all of these disruptions, Fiserv still expects to grow revenues throughout its reinvestment period and generate substantial free cash flow, because Fiserv remains a strong business with high recurring revenues and essential offerings across its end markets. We are excited to own Fiserv at these levels, as we believe substantial price compounding will be in order over the coming years. |
| GE | The IGBT—the power semiconductor that made modern motor control possible—was invented at General Electric by B. Jayant Baliga. Jack Welch sold GE's semiconductor division in 1988 |
| GLW | Once again, GLW outperformed during the quarter, driven by strong demand in Optical Communications, particularly GenAI-related products. Increasing data speed and bandwidth requirements, both inside and outside data centers, are boosting demand. The uptick in topline has driven meaningful operating leverage. We believe GLW's diversified portfolio of innovative, value-added products is well-positioned to capitalize on secular growth trends. |
| GOOGL | I'm willing to go bankrupt rather than lose this race. Larry Page, co-founder of Google |
| HD | Conversely, our biggest detractors this quarter were DR Horton (DHI), Lennar Corp (LEN), Home Depot (HD). |
| LOW | Stocks like Lowe's and Home Depot have suffered from the housing slowdown. |
| MSFT | OpenAI's well-documented 'circular' funding with its business partners (NVIDIA, Microsoft, among others) is additional cause for concern. |
| MU | We took a position in Micron Technology early in the quarter to gain exposure to high-bandwidth memory, a clear bottleneck in chip development. The position was later sold for a solid gain. |
| NOW | In the case of ServiceNow, the stock weakened following reports of a potential large acquisition while the company has also been challenged by bearish sentiment across the software as a service or SAAS segment. |
| PH | The provider of monitors and sensors highlighted an increase in orders across its business, supported by stronger aerospace and HVAC (heating, ventilation and air conditioning) demand. |
| QCOM | I remember like yesterday when Qualcomm was the top performing stock in 1999 rising a spectacular 2,619%; it then dropped over 85% by 2002. |
| RTX | RTX Corporation (RTX) - formerly known as Raytheon Technologies Corporation, is a major American multinational aerospace and defense company headquartered in Arlington, Virginia. It is one of the largest aerospace and defense manufacturers globally, serving commercial, military, and government customers across more than 180 countries. RTX benefits from a very large backlog of commercial and defense orders, which provides multiyear revenue visibility and supports long-term planning. Backlog levels have grown significantly, reflecting robust demand across segments and helping underpin future sales. As global air travel continues recovering toward pre-pandemic levels, demand for new aircraft and maintenance, repair and overhaul (MRO) services is increasing. Commercial aftermarket sales—parts, service contracts, and support—have been a strong driver of organic growth due to rising airline utilization. RTX's Raytheon segment benefits from rising defense budgets in the U.S. and allied countries. Growth is underpinned by demand for integrated air and missile defense systems (e.g., Patriot), counter-drone technologies, and other advanced defense programs driven by geopolitical tensions. International orders are a growing portion of the defense backlog. The entire Defense Prime complex is currently re-rating as countries around the world are committing to spend more on defense initiatives and we like RTX for the above reasons and add that the company's three distinct business segments—Pratt & Whitney (engines), Collins Defense and Aerospace (avionics and systems), and Raytheon (defense systems)—provide revenue balance across commercial and government markets. This diversification helps mitigate cyclical downturns in any single area. Valuation has increased, but we believe the defensive narrative is still early, allowing for a reasonable balance between risk and reward. |
| UNH | Exited UnitedHealth Group where we had diminished conviction in the company's growth outlook. |
| VLO | increasing Valero (VLO) and Phillips 66 (PSX) on strong refinery dynamics. |
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