Is Encompass Health (EHC) an Attractive Long-Term Bet?

1 hour ago 1

Soumya Eswaran

Fri, July 17, 2026 astatine 9:45 AM CDT 3 min read

Madison Small Cap Fund, managed by Madison Funds, released its Q2 2026 capitalist letter. A transcript of the missive tin beryllium downloaded here. The small-cap marketplace showed exceptional spot successful Q2, mostly owed to anticipated bid successful the Middle East. The Russell 2000 Index began to rally, propelled by Information Technology, Health Care, and Industrials. The Madison Small Cap Fund (Class I) returned 12.7% successful the quarter, underperforming the Russell 2000's 21.5% and Russell 2500's 20.2%. While beardown gains were seen successful Info Tech investments, caller investments successful underperforming bundle companies negatively impacted wide performance. Nevertheless, assurance successful the semipermanent imaginable of these bundle investments remains high. The steadfast is optimistic astir tiny caps, noting their caller outperformance implicit ample caps, betterment successful definite bundle sectors, and improvements successful immoderate lodging stocks toward the extremity of the 2nd quarter. Please reappraisal the Fund's apical 5 holdings to summation insights into their cardinal selections for 2026.

In its Q2 2026 capitalist letter, Madison Small Cap Fund highlighted Encompass Health Corporation (NYSE:EHC). Encompass Health Corporation (NYSE:EHC) is simply a starring inpatient rehabilitation services provider. On July 16, 2026, Encompass Health Corporation (NYSE:EHC) closed astatine $356.24 per share, reflecting a marketplace capitalization of $4.35 billion. Encompass Health Corporation (NYSE:EHC) posted a one-month instrumentality of 15.96%, portion its shares gained 3.33% implicit the past 52 weeks.

Madison Small Cap Fund stated the pursuing regarding Encompass Health Corporation (NYSE:EHC) successful its Q2 2026 capitalist update:

"Our largest healthcare presumption successful Encompass Health Corporation (NYSE:EHC) was up lone modestly successful the quarter. We judge this continues to beryllium an fantabulous semipermanent concern but the existent marketplace situation favors smaller, much volatile names. We proceed to spot worth successful the aesculapian instrumentality abstraction and are allocating much superior into these names erstwhile appropriate."

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Encompass Health Corporation (NYSE:EHC) is not connected our database of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 44 hedge money portfolios held Encompass Health Corporation (NYSE:EHC) astatine the extremity of the archetypal quarter, compared to 50 successful the erstwhile quarter. While we admit the imaginable of Encompass Health Corporation (NYSE:EHC) arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you're looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock.

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