Growth Trajectory and Attractive Valuations Support Henry Schein’s (HSIC) Bullish Thesis

MD Sass , a boutique asset management firm, published its second-quarter investor update for its flagship, the "MD Sass Concentrated Value Strategy." The letter can be downloaded here . In the first half of 2026, AI infrastructure stocks led the market, with the Russell 1000 Value increasing by 16.3%, outpacing the S&P 500 (10.2%) and Russell 1000 Growth (5.3%). This growth was fueled by semiconductor, memory, and hardware companies benefiting from AI development, even though they are considered cyclical. These sectors, representing only 7.7% of the Russell 1000 Value at the start of the year, contributed nearly 70% of its returns. The portfolio gained 10.0% in the second quarter, net of fees, compared to 13.9% for the Russell 1000 Value Index. Year-to-date, the strategy returned 6.6%, net of fees, versus 16.3% for the Index. The portfolio faced challenges due to limited exposure to companies with the greatest upside from AI infrastructure investments. It also lacked exposure to the Energy sector, which returned about 20% in the first half amid geopolitical tensions with Iran that increased commodity prices, affecting performance. The firm recognizes the importance of adapting its strategies while maintaining core investment principles as it explores future opportunities in emerging technological themes. Also, check the fund's top five holdings to see its best picks in 2026.

In its second-quarter 2026 investor letter, MD Sass Concentrated Value Strategy highlighted Henry Schein, Inc. (NASDAQ: HSIC ) as a notable contributor. Henry Schein, Inc. (NASDAQ:HSIC) is a leading distributor of dental products and services. On August 28, 2026, Henry Schein, Inc. (NASDAQ:HSIC) closed at $89.52 per share. Over the past month, Henry Schein, Inc. (NASDAQ:HSIC) returned 3.48%, while its shares have gained 28.66% in the last 52 weeks. Henry Schein, Inc. (NASDAQ:HSIC) has a market capitalization of $9.98 billion, and its stock has traded within a 52-week range of $61.95 to $92.18.

MD Sass Concentrated Value Strategy stated the following regarding Henry Schein, Inc. (NASDAQ:HSIC) in its Q2 2026 investor letter:

"Henry Schein, Inc. (NASDAQ:HSIC), the world's largest provider of healthcare solutions to office-based dental and medical professionals, appreciated 13% in Q2. Strong earnings results and a positive outlook for the balance of the year created a very favorable setup for the company to exceed its full year guidance. We believe that significant cost reductions, combined with accelerating revenue growth, should lead to material positive earnings revisions as we move into Q4 and 2027. We met with HSIC's new CEO, Fred Lowery, and believe his track record, extensive distribution experience, and "outsider" mentality should translate into improved efficiencies and margins, a more profitable product mix, and market share gains. Our estimates remain well above consensus over the next several years, and we believe the stock remains attractively valued on both an absolute and relative basis."

Henry Schein, Inc. (NASDAQ:HSIC) is not on our list of the 40 Most Popular Stocks Among Hedge Funds . As per our database, 45 hedge fund portfolios held Henry Schein, Inc. (NASDAQ:HSIC) at the end of the second quarter, which was 46 in the previous quarter. While we acknowledge the potential of Henry Schein, Inc. (NASDAQ:HSIC) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock .

In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years .

Disclosure: None. This article is originally published at Insider Monkey .