Peer Discount Creates Compelling Opportunity at QXO (QXO) Soumya Eswaran Fri, November 13, 2026 at 11:45 AM EST 3 min read ^GSPC -0.93% QXO -1.13% Trade QXO on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Sound Shore Management, an investment management firm, has released its third-quarter 2026 investor letter. The letter can be downloaded here. In the quarter, the Sound Shore Fund Investor Class (SSHFX) and Institutional Class (SSHVX) declined by 1.37% and 1.34%, respectively, underperforming the Russell 1000 Value Index (up 2.61%) and the S&P 500 (up 2.30%). Over three years, SSHFX gained 19.67%, while SSHVX gained 19.91%, both lower than the Russell Value's 20.07% and the S&P 500's 22.89%. Long-term, Sound Shore's 35-year annualized returns of 10.44% for SSHFX and 10.70% for SSHVX compared to the Russell Value's 10.38% and S&P 500's 11.02% return. In the quarter, the market remained resilient, with the S&P 500 gaining 2.3% despite macroeconomic challenges, while concentration risk in technology stocks remains high despite breadth weakening. The median stock in the Russell 1000 Value Index showed less than 1% growth year-to-date. Looking ahead, geopolitical tensions and macroeconomic uncertainties, particularly with the U.S. midterm elections, may affect market volatility. Sound Shore remains committed to its strategy of focusing on cash-flow-resilient businesses with robust balance sheets while maintaining a disciplined investment process. Also, check the fund's top five holdings to see its best picks in 2026.
In its Q3 2026 investor letter, Sound Shore Fund noted that QXO, Inc. (NYSE:QXO) detracted from performance. QXO, Inc. (NYSE:QXO) is a leading US-based roofing, waterproofing, and complementary building products distributor. On November 12, 2026, QXO, Inc. (NYSE:QXO) closed at $12.81 per share with a market capitalization of $13.29 billion. Over the past month, QXO, Inc. (NYSE:QXO) gained 16.40%, despite a 52-week loss of 27.68%.
Sound Shore Fund stated the following regarding QXO, Inc. (NYSE:QXO) in its Q3 2026 investor letter:
"U.S. Treasury yields rose across the maturity spectrum during the third quarter, with the 10-year Treasury yield reaching 5.29% - its highest quarter-end level since June 2007. As a result, interest rate-sensitive stocks came under pressure, driven by algorithmic program trading that executes baskets of similar stocks with little regard for fundamental differentiation. One such stock was building products distributor QXO, Inc. (NYSE:QXO), which proved to be a detractor for the quarter. We initiated our position in the fourth quarter of 2025, focused on the track record of QXO's CEO, Brad Jacobs. Jacobs is a serial entrepreneur, with proven success in previous roll-ups at United Waste Systems, United Rentals, and XPO. He leverages scale and technology investments to outperform peers and we expect the same outcome at QXO. The company is currently rolling out critical technology investments, such as new warehouse management systems, which should drive double-digit organic earnings growth over multiple years. Despite the positive momentum, the stock trades at a discount to its distribution peers and we have been adding to the position."
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In another article, we discussed QXO, Inc. (NYSE:QXO) and shared top stock picks from Michael Burry portfolio. In addition, please check out our hedge fund investor letters Q3 2026 page for more investor letters from hedge funds and other leading investors.
This article is originally published at Insider Monkey.
