Ericsson's Strong Q4 Performance Catches Value Investors' Eye
The Hotchkis & Wiley Global Value Fund closed out 2025 on a high note, outpacing its benchmark with a 3.80% return for the fourth quarter. In its recently released investor letter, the fund management highlighted Sweden's Telefonaktiebolaget LM Ericsson (NASDAQ: ERIC) as a standout contributor to this performance.
Ericsson, a global leader in networking and telecommunications equipment, saw its stock price climb 14.63% in the month leading up to January 29, 2026, capping off a remarkable 52-week gain of over 45%. The company's resurgence is largely attributed to accelerating 5G network deployments worldwide and a strategic repositioning within a competitive market. With a market capitalization now exceeding $37 billion, Ericsson's rally provided a significant boost to funds holding its shares.
"Our overweight position in select international equities, including Ericsson, proved advantageous," the fund's letter stated. It noted that while non-U.S. stocks broadly outperformed in 2025, compelling valuation gaps persist. The fund remains bullish on certain software sectors but pointed to infrastructure plays like Ericsson as currently offering attractive risk-adjusted returns based on current market conditions.
Despite its strong run, Ericsson was not among the 30 most popular stocks in hedge fund portfolios at the end of Q3 2025, with holdings slightly decreasing from 17 to 16 funds. This suggests the investment thesis may still be under the radar for many institutional investors.
Investor Reactions:
Michael Thorne, Portfolio Manager at Veritas Capital: "This validates a patient value approach. Ericsson was priced for stagnation, but their execution on 5G contracts and cost discipline is now translating directly to the bottom line. It's a textbook case of the market catching up to fundamentals."
Sarah Chen, Independent Tech Analyst: "It's a solid quarter, but let's not get carried away. This feels more like a catch-up from being oversold than a transformative growth story. Their margins are still under intense pressure from Huawei and Nokia. I'd be cautious at these levels."
David Riggs, a private investor commenting on an investment forum: "Finally! I've been holding ERIC through years of disappointment. The 5G rollout cycle is real, and it's only in the middle innings. This letter just confirms what the charts have been screaming for months."
Priya Sharma, CFO at a mid-sized pension fund: "The fund's overall strategy of seeking value outside the crowded U.S. market is intriguing. Ericsson's performance is a prime example of the alpha potential available when you dig deeper into regional champions."
Disclosure: This analysis is based on publicly available fund documents and market data. It is for informational purposes only and not investment advice.