Diamond Hill Small Cap Strategy Bets on Deeply Discounted Alexandria Real Estate Equities (ARE). Here’s Why

1 hour ago 5

Soumya Eswaran

Thu, February 5, 2026 astatine 7:06 AM CST 3 min read

Diamond Hill Capital, an concern absorption company, released its “Small Cap Strategy” fourth-quarter 2025 capitalist letter. A transcript of the missive tin be downloaded here. The 4th fourth posted different play of favorable gains for equity markets, with the Russell 2000 Index returning 2.19%, astir successful enactment with the Russell 1000 Index’s 2.41% gain. Health attraction (+18.6%) emerged arsenic the best-performing assemblage successful the Russell 2000 Index. Heightened uncertainty and geopolitical risks contributed to a mixed marketplace situation successful 2025 and Q4, yet the Russell 2000 Index inactive posted a 12.81% summation for the year. Heading into 2026, the steadfast continues to absorption connected resilient businesses that tin prolong net successful a volatile landscape. The Strategy returned 4.88% (net of fees) successful the 4th compared to the Russell 2000 Index’s 2.19% gain. Please reappraisal the Strategy’s apical 5 holdings to summation insights into their cardinal selections for 2025.

In its fourth-quarter 2025 capitalist letter, Diamond Hill Small Cap Strategy highlighted stocks similar Alexandria Real Estate Equities, Inc. (NYSE:ARE). The strategy initiated a presumption successful Alexandria Real Estate Equities, Inc. (NYSE:ARE), a beingness subject REIT, during the quarter. On February 4, 2026, Alexandria Real Estate Equities, Inc. (NYSE:ARE) banal closed astatine $55.31 per share. Alexandria Real Estate Equities, Inc. (NYSE:ARE) delivered a 3.83% instrumentality successful the past month, and its shares are down 42.76% implicit the past 12 months. Alexandria Real Estate Equities, Inc. (NYSE:ARE) has a marketplace capitalization of $9.585 billion.

Diamond Hill Small Cap Strategy stated the pursuing regarding Alexandria Real Estate Equities, Inc. (NYSE:ARE) successful its 4th fourth 2025 capitalist letter:

"We initiated a presumption successful Alexandria Real Estate Equities, Inc. (NYSE:ARE) — the largest proprietor of US life-sciences existent property with a attraction successful large biotech probe clusters — arsenic the assemblage has been nether unit from higher involvement rates, little task superior funding, regulatory unit and overbuilding of caller laboratory space. Additionally, the institution is moving done a large, poorly timed improvement and onshore pipeline resulting successful a large simplification successful net and a dividend cut. After respective years of underperformance, the shares are present profoundly discounted and bespeak galore of these challenges; however, the institution inactive maintains a coagulated equilibrium sheet, a agelong operating past and a well-located portfolio."

Alexandria Real Estate Equities, Inc. (NYSE:ARE) is not connected our database of 30 Most Popular Stocks Among Hedge Funds. According to our database, 31 hedge money portfolios held Alexandria Real Estate Equities, Inc. (NYSE:ARE) astatine the extremity of the 3rd quarter, compared to 33 successful the erstwhile quarter. While we admit the imaginable of Alexandria Real Estate Equities, Inc. (NYSE:ARE) arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you're looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock.