Soumya Eswaran
4 min read
Fiduciary Management Inc. (FMI), an independent money management firm, released its second-quarter 2026 investor letter. The letter can be downloaded here. The letter argues that markets posted modest Q3 gains, but rising rates, oil prices, and leverage drove a sharp decline in small-cap stocks. It cautions that elevated valuations, extreme investor optimism, and heavy S&P 500 concentration in AI-related companies make current returns difficult to sustain. While AI is driving investment and earnings growth, the firm sees opportunities in high-quality businesses unfairly punished by perceived AI risk—particularly Jack Henry, CDW, and RELX—which it believes can benefit from AI rather than be disrupted by it. Also, check the Fund’s top five holdings to see its best picks for 2026.
In its Q3 2026 investor letter, Fiduciary Management Inc. highlighted RELX PLC (NYSE:RELX), a British-based information analytics and decision solutions provider for professional and business customers. On October 30, 2026, RELX PLC (NYSE:RELX) closed at $40.10 per share with a market capitalization of $69.67 billion. RELX PLC (NYSE:RELX) posted a 1-month return of 17.96% and a 52-week loss of 9.03%, trading within a 52-week range of $27.57 to $44.79.
Fiduciary Management Inc. stated the following regarding RELX PLC (NYSE:RELX) in its Q3 2026 investor letter:
“RELX PLC (NYSE:RELX) – International RELX is a business services organization comprising four distinct business units – Risk, Legal, STM (Scientific, Technical, and Medical), and Exhibitions, though the first three drive the bulk of the investment case today. The commonality between these organizations is deep industry expertise and advantages built through the development, maintenance, and monetization of valuable data and content. For example, the Risk business provides customer risk analysis that aids in effective underwriting in the domestic auto insurance industry. Risk marries a contributory database sourced from industry with proprietary data gathered by RELX and licensed datasets purchased from others to create a more comprehensive view of a prospective customer than any single insurer could develop alone. At Legal, RELX has developed a deep archive of case law, legal precedent, and statutes built over decades to create one of two authoritative legal research repositories in the U.S. RELX was an early mover on AI in this vertical and has released product features that accelerate the legal research process and support the attorney workflow. This is translating into attractive incremental economics for RELX today – what was once a reliable 1-2% grower is now compounding revenue at a high-single-digit clip. STM publishes academic journals and develops related decision support tools for researchers. As low-quality AI-created content proliferates, STM’s position as the trusted gatekeeper to prestigious industry journals will likely become more, not less, important. Like Legal, STM is seeing faster growth today as article volumes rise and management leans into AI-enabled capability in the research support products that sit atop one of the largest journal archives in the world. Investors are ignoring the growth acceleration seen across RELX’s businesses and instead over-emphasizing the still-theoretical risk to RELX’s data assets posed by AI-native entrants. We view RELX’s incumbent market position as difficult to displace, and we’re encouraged by management’s adoption of AI tools within the closed loop product suite. RELX has navigated technological change in the past, and we think the odds are good that management will continue to position the business for success. We expect the market to eventually recognize that acceleration and re-rate the shares accordingly, closing a valuation gap we do not think reflects the quality or durability of the underlying business.”
