Wedgewood Partners , an investment management company, released its third-quarter 2026 investor letter. The letter can be downloaded here . Wedgewood Composite delivered a net return of 2.5% in the quarter, compared to 2.3% for the Standard & Poor's 500 Index, 0.9% for the Russell 1000 Growth Index, and 2.6% for the Russell 1000 Value Index. Surging Treasury yields and macro headwinds have heavily pressured rate-sensitive stocks and market breadth, driving equal-weighted S&P 500 underperformance. However, AI resilience and mega-cap tech pushed the NASDAQ 100 to record highs. While rising inflation, energy price spikes, and higher interest rates continue to pressure broader equities, the firm is actively deploying capital into compelling new positions, recently adding Toll Brothers, Hermès, and TJX Companies. Also, check the strategy's top five holdings to see its best picks in 2026.
In its Q3 2026 investor letter, Wedgewood Partners highlighted that Old Dominion Freight Line, Inc. (NASDAQ: ODFL ) weighed on the portfolio's returns during the quarter. Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is a less-than-truckload motor carrier that provides regional, inter-regional, and national less-than-truckload services, as well as expedited transportation. On October 16, 2026, Old Dominion Freight Line, Inc. (NASDAQ:ODFL) closed at $187.72, with a $38.92 billion market capitalization. Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is up 20.46% YTD, trading within a 52-week range of $32.20 to $118.38.
Wedgewood Partners stated the following regarding Old Dominion Freight Line, Inc. (NASDAQ:ODFL) in its Q3 2026 investor letter:
"Old Dominion Freight Line, Inc.(NASDAQ:ODFL) detracted from portfolio performance in the 3rd quarter despite reporting 10% revenue growth and 32% earnings-per-share growth. As we mentioned in previous letters, the stock had already discounted some of this earnings recovery, so the market mostly "sold the news" this quarter. However, we think the recovery in LTL activity is nascent, and, more importantly, the industry has undergone a secular shift toward better capacity management, particularly after the Covid-19 shock and the ensuing multi-year downturn drove consolidation and tighter regulations. For instance, Old Dominion has better managed the spike in diesel prices, passing fuel costs through to customers who demand OD's high level of service and availability. Further, the Company is the best operator in the LTL industry, driving incremental gains in direct operating-cost efficiency on top of industry wide benefits from capacity rationalization. While most of the "non-AI" portion of the US Industrial economy remains stagnant, we think Old Dominion can continue to drive double digit earnings growth against this backdrop. With further recovery in the rest of the US Industrial economy, we think there could be substantial upside."
Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is not on our list of the 40 Most Popular Stocks Among Hedge Funds . As per our database, 52 hedge fund portfolios held Old Dominion Freight Line, Inc. (NASDAQ:ODFL) at the end of the second quarter, which was 51 in the previous quarter. While we acknowledge the risk and potential of Old Dominion Freight Line, Inc. (NASDAQ:ODFL) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Old Dominion Freight Line, Inc. (NASDAQ:ODFL) and that has 10,000% upside potential, check out our report about this cheapest AI stock .
In another article we covered Old Dominion Freight Line, Inc. (NASDAQ:ODFL) and highlighted its 4.9% rate increase, noting margin benefits will depend on freight volumes and cost discipline. In addition, please check out our hedge fund investor letters Q3 2026 page for more investor letters from hedge funds and other leading investors.
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This article is originally published at Insider Monkey .
