Weitz Investment Management Adds Veralto to Large Cap Equity Fund Amid Market Rally
The firm cites Veralto’s dominant positions in water quality and packaging as key drivers for the new position, while the Large Cap Equity Fund’s Institutional Class returns 7.03 per cent for the second quarter.
Weitz Investment Management has added Veralto Corporation to its Large Cap Equity Fund, according to the firm’s second-quarter 2026 investor letter released on 17 August. The move marks a new position for the fund, which identified Veralto’s leading market standing in water quality and packaging sectors as central to its investment thesis.
The fund highlighted Veralto’s expected organic growth and potential for operating margin expansion. Management noted that the company possesses enviable economics across its water analytics, treatment, and product traceability businesses, providing a clear pathway for value-creating capital deployment.
Weitz described Veralto as a repeat holding, which allowed the firm to act opportunistically at favourable prices during the quarter. The investment comes as equity markets experienced a broad surge driven by economic resilience and easing tensions in the Middle East.
Despite the positive sentiment in the broader market, the Large Cap Equity Fund’s Institutional Class returned 7.03 per cent in the second quarter. This performance trailed the Bloomberg U.S. 1000 Index, which posted a return of 15.49 per cent. The disparity was largely attributable to strong gains in AI-related stocks, particularly semiconductor firms, which benefited from heightened investor interest in technology bottlenecks.
At the time of the letter’s release, Veralto shares closed at $97.68 on 14 August, valuing the company at $23.81 billion. The stock had risen 4.86 per cent over the preceding month but remained down 8.45 per cent over the past 52 weeks. Data from the first quarter indicated that 57 hedge fund portfolios held Veralto, an increase from 55 in the prior period.
The Large Cap Equity Fund maintains a portfolio of 30 companies, with the top 10 holdings accounting for more than half of the assets. The firm’s price-to-value ratio sits in the upper-70s, a metric Weitz associates with strong return potential. The fund continues to adhere to its philosophy of investing in quality companies at undervalued prices, prioritising long-term value over short-term momentum.
While acknowledging Veralto’s potential, Weitz noted that certain AI stocks currently offer greater upside potential with less downside risk. The firm’s major positions in hyperscaler cloud providers yielded mixed results during the quarter, as risk-on factors such as momentum and growth significantly outpaced defensive strategies.
