CoStar (CSGP): Residential Strategy Unchanged Despite Persistent Market Skepticism
Weitz Investment Management's second-quarter 2026 investor letter for the Multi Cap Equity Fund highlights CoStar Group, Inc. (NASDAQ:CSGP) despite market skepticism. The fund's Institutional Class returned 7.90%, underperforming the 15.71% gain of the Bloomberg U.S. 3000 Index. Markets climbed on prospects of reducing Middle East tensions and curbing oil flow.
Investor focus shifted back to artificial intelligence, yet component shortages like processing chips impacted profits and valuations. Valuation-minded investors are selective within the AI sector compared to relaxed strategies of valuation-agnostic indexes. Weitz Multi Cap Equity Fund's top five holdings could reveal its best picks for 2026.
In its Q2 2026 letter, the fund mentions CoStar Group, Inc. prevailing in its conflict with an activist investor and staying committed to its residential real estate strategy. Despite investor skepticism, the fund believes the current price may have overpunished the stock. CoStar Group, Inc. is not among the 40 most popular stocks among hedge funds; 58 held it at quarter-end, down from 62 in the previous quarter.
The fund acknowledges CoStar Group's investment potential but believes certain AI stocks offer more upside and less downside risk.
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