| 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 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
BuybacksShare repurchases in 2024 and 2025 hit consecutive records as companies raced to meet Tokyo Stock Exchange capital efficiency mandates. Buybacks were a primary driver of the market's 20% climb in the first half of FY2025. |
Share Repurchases Capital Efficiency TSE Mandates Shareholder Returns Records | |
Capital MarketsCapital markets are wide open with elevated levels of debt issuance, equity offerings, and M&A volumes. Falling interest rates, rising equity prices, and improving corporate confidence are driving an optimistic outlook for deals, which should benefit advisory firms, rating agencies, and alternative asset managers. |
Investment Banking M&A Debt Issuance Advisory Alternative Assets | |
Defense SpendingContinued strength in European defense equities as capital-intensive businesses like defense contractors are having their moment. Investors are waking up to their mission critical role in the rebuilding of supply chains and national security complexes. |
Europe Contractors Security Infrastructure | |
ValueManager emphasizes investing in controlled companies trading at significant discounts to NAV, with European holding companies showing discounts of 30-68%. The strategy focuses on securities mispricing where real value exists, contrasting with overvalued technology stocks. |
Discounts NAV Mispricing Undervalued Controlled | |
| 2025 Q3 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
| 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 | Miles mentioned that he had been a long-term shareholder of Berkshire Hathaway and had never sold his shares. Over roughly twenty-five years, his investment compounded at about 10.9% annually. The first dollar he invested became approximately thirteen dollars. Since around 1990, Berkshire has only marginally outperformed the S&P 500. By Buffett's own historical standards, this period could be described as mediocre. And yet, admiration for Buffett has not faded—if anything, it has intensified. |
| 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 | Construction + Mining at low mid-cycle levels; dealer destock largely complete. Non-Residential + manufacturing starts inflecting (manufacturing starts 5X trailing 12-month average in June). Pricing Re-Accelerating, inventories bottoming → classic machinery trough signals. De-Globalization + OBBB tailwinds (bonus depreciation = ~700bps spend tailwind). Five Prior Cycles = ~150% avg alpha vs. S&P 500® Index from trough to peak. |
| 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 | Notable detractors from performance came from Fiserv (-43bps absolute and -39bps relative) |
| GE | For insight into the real economy operating beneath this AI and data center boom, we must look elsewhere within the S&P 500, including bellwethers like General Electric |
| 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 | In the third quarter, Google, Kairos Power, and the Tennessee Valley Authority announced a major collaboration centered on a novel power purchase agreement. Google followed this announcement with another significant step forward. On October 27, Google and NextEra Energy announced plans to restart the Duane Arnold Energy Center. |
| 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 | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| MU | Core gains were led by investments in the Technology sector including Micron |
| 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 | United Healthcare had its own challenges, with surprise losses, a complicated political situation, and leadership changes. |
| VLO | increasing Valero (VLO) and Phillips 66 (PSX) on strong refinery dynamics. |
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