Fenimore Asset Management, an investment management company, released its Q4 2025 investor letter. A copy of the same can be downloaded here. The stock market was solid in 2025 but volatile. While investors balanced AI enthusiasm, economic uncertainty, and monetary policy concerns. The summer rally was driven by AI-related spending and economic resiliency, whereas the fourth quarter saw a more volatile market due to valuation pressures and macro uncertainty. Stocks from the large-cap technology and communication services sectors led the market in the quarter, with the S&P 500 Index rising 2.66%. The firm believes that the trend of AI stocks outpacing high-quality stocks is unsustainable. In Q4 2025, Fenimore Small Cap Strategy returned -4.12%, trailing its benchmark, the Russell 2000 Index’s 2.19% return. The underweight exposure to low-quality stocks drove the underperformance in the quarter. Fenimore Dividend Focus Strategy declined -4.41% in Q4 compared to the Russell Midcap Index’s 0.16% return. Furthermore, Fenimore Value Strategy declined -1.17% in Q4 compared to the Russell Midcap Index’s 0.16% return. Investments in the financial and industrial sectors led to the relative underperformance of the Strategy in the quarter. The firm expects mixed market conditions in 2026 as many AI-related stocks look expensive while high-quality companies are trading at multi-year lows, creating opportunities. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Fenimore Asset Management highlighted stocks such as Trane Technologies plc (NYSE:TT). Trane Technologies plc (NYSE:TT) was among the key performance detractors in Fenimore Dividend Focus Strategy during the quarter. Trane Technologies plc (NYSE:TT) provides solutions for heating, ventilation, air conditioning, and transport refrigeration. On January 15, 2026, Trane Technologies plc (NYSE:TT) stock closed at $387.27 per share. One-month return of Trane Technologies plc (NYSE:TT) was -0.66%, and its shares lost 0.49% of their value over the last 52 weeks. Trane Technologies plc (NYSE:TT) has a market capitalization of $86.174 billion.
Fenimore Asset Management stated the following regarding Trane Technologies plc (NYSE:TT) in its fourth quarter 2025 investor letter:
“Trane Technologies plc (NYSE:TT) continued to be a juggernaut, in our view, as earnings and backlog remained strong. AI data center cooling was a strong contributor while its residential HVAC business is experiencing weakness as the industry changes over to a new refrigerant. This softness runs across all residential HVAC firms and we expect clarity regarding this challenge in the near future.”
Boykin Air 