Value in Action
After a very slow start to the year, the Value Fund surged +10.9% in Q2, bringing its year-to-date return to +1.9%. (1)
At last month’s Annual Meeting, we addressed the rumoured “ Death of Value Investing ” and highlighted signs of the market’s frothiness and pervasive risk-taking. Right on cue, the market appears to be rotating away from momentum and back to valuations.
Value investing periodically goes out of favour, and yet it endures. That’s because over the long term , it works when consistently applied. Perhaps this is our time to shine.
Portfolio Update
Our top performer in the second quarter was ICON plc (ICLR) , which gained 57%. The surge followed the release of ICLR’s delayed year-end and first-quarter results, which provided clarity on the accounting issues that had previously weighed heavily on the stock ICLR had been the Value Fund’s largest detractor in the first quarter, after announcing in February that it would delay its year-end results and restate its 2023 and 2024 financial statements due to revenue overstatements. The stock plummeted as investors rushed to sell amid the uncertainty.
We spent the next 24 hours reviewing the company’s disclosures and examining the allegations in a whistleblower lawsuit. We concluded that ICLR’s ability to generate $1 billion of free cash flow was unlikely to be materially affected and that these issues would not affect its customer relationships. With the stock trading at a free cash flow yield of approximately 15%—despite remaining, in our view, a high-quality business with attractive growth prospects— we decided to materially increase our position.
(1) All returns and Fund details are: (a) based on Class F units; (b) net of all fees; and (c) as of June 30, 2026.
The delayed results released in Q2 validated our assessment. The restatement reduced reported revenue by less than 2% and had no material effect on the company’s cash generation. Forward-looking indicators also look promising heading into 2027: direct fee book-to-bill exceeded 1.3x in each of the past two reported quarters, with management expecting it to remain above 1.2x in Q2. This suggests the company should resume attractive growth next year.
Importantly, ICLR’s bookings growth outpaced its large clinical research organization (CRO) peers, providing evidence that its competitive position and customer relationships remain intact.
As the uncertainty receded and investors refocused on the company’s underlying earnings power, the shares rerated. By quickly adding to our ICLR position amidst peak pessimism in mid-February, we were rewarded when its shares appreciated by over 90% in less than five months. Value investing requires the discipline to wait patiently for opportunities—and the conviction to act aggressively when they arrive. This ICON episode is a textbook example of that philosophy in action.
Our second-best performer during the quarter was Compagnie Financière Richemont (CFRUY) , which gained +30.8%. The company continues to execute exceptionally well despite a challenging environment for the broader luxury industry. Richemont’s flagship Jewellery Maisons—Cartier and Van Cleef & Arpels—benefit from strong exposure to ultra-high-net-worth consumers. This has helped insulate the company from many of the pressures facing luxury peers, as more aspirational consumers have remained cautious with discretionary spending.
Navigating high inflation in precious metals and labour, management implemented measured price increases that offset margin pressure without dampening demand. This disciplined approach contrasts sharply with several competitors that raised prices aggressively during the recent luxury boom—damaging their value proposition and struggling to balance pricing, volume, and brand prestige.
We have long admired Richemont’s willingness to prioritize long-term brand equity over short-term profits. Its disciplined approach to pricing, distribution, and product availability is paying dividends today.
Alphabet Inc (GOOG) , +23.2%, was our third-best performer in the quarter. After more than two years of market concern that AI chatbots would cannibalize Google’s core search business, recent results are proving those fears unfounded. Boosted by AI Overviews and AI mode, Search revenue grew nearly 20% in the most recent quarter. This performance was driven primarily by higher paid-click volume, alongside a modest rise in revenue per click—demonstrating that AI integration is enhancing , rather than displacing, the platform’s core value proposition.
Alphabet’s Cloud division is showing even stronger momentum: its backlog has nearly doubled, while operating margins expanded to 33%, highlighting both robust demand and expanding operating leverage. Meanwhile, management continues to invest heavily in compute infrastructure. With market-leading positions across search, cloud, digital advertising, and AI, we believe Alphabet remains exceptionally well-positioned to earn strong returns on its capex and compound intrinsic value over time.
Elevance Health (ELV) was another strong contributor during the quarter, gaining 32.1%. Profitability has begun to turn the corner following a challenging period marked by elevated medical cost inflation across its government-sponsored insurance plans.
While medical utilization remains elevated, cost trends have stabilized into a more predictable pattern, and government reimbursement updates were more favorable than expected. We anticipate 2026 will mark the bottom for operating margins, with disciplined repricing and better alignment between premiums and medical expenses driving an earnings recovery in 2027. Our investment thesis remains grounded in the strength of ELV’s commercial health insurance franchise, which continues to perform well and provides a durable foundation for the company’s long-term earnings power.
Our largest detractor during the quarter was Intercontinental Exchange (ICE) , which declined 21.7%. The company’s underlying performance remains strong, with revenue and earnings increasing 20% and 34%, respectively, to start the year. Nevertheless, ICE’s shares declined alongside peers including Cboe Global Markets (CBOE) and CME Group (CME) , amid concerns of a cyclical peak in earnings.
Investors are also concerned that a relatively new product known as “perpetual futures” could pose a competitive threat to incumbent derivatives exchanges. Trading activity is currently concentrated in cryptocurrency markets, but several recent product announcements have raised concerns that perpetual futures could expand into more traditional asset classes.
We view these concerns as overblown, particularly for ICE’s flagship energy markets (such as Brent crude and TTF natural gas). ICE’s core users are commercial hedgers and institutional investors, not retail speculators. These market participants rely on fixed settlement dates, standardized contracts, deep liquidity, robust clearing, and established regulatory oversight—features perpetual futures do not prioritize.
Furthermore, should institutional demand for perpetual contracts ever materialize, ICE is well-positioned to launch its own offerings. Its market-leading technology, clearing infrastructure, regulatory standing, and global customer base give it a massive advantage over emerging platforms.
While record volatility set a high bar for year-over-year volume comparisons, ICE’s diversified footprint across exchanges, data, and mortgage technology should enable it to continue compounding earnings and intrinsic value over the long run.
Lockheed Martin (LMT) was our second-largest detractor during the quarter, declining 15.7%. The sell-off was primarily driven by execution challenges within its Aeronautics division, which delayed aircraft deliveries and required additional rework on certain fixed-price contracts. These issues weighed on near-term profitability and raised concerns about the company’s ability to meet its production targets.
We view these operational headwinds as temporary. Global demand for defence capabilities remains exceptionally strong as governments replenish depleted inventories and navigate an increasingly complex geopolitical backdrop. Anchored by leading positions across critical defence programs, Lockheed Martin remains well-positioned to drive long-term cash generation as execution normalizes and order backlogs convert into deliveries.
We made no major changes to the portfolio during the quarter. Our top 10 holdings as of the end of Q2 are listed below.
GreensKeeper Value Fund
* As of June 30, 2026. The Value Fund’s holdings are subject to change and are not recommendations to buy or sell any security.
Annual Meeting
We had an excellent turnout at last month’s Annual Meeting. This year’s presentation focused on the increasing risks we are seeing in the current market environment, how we are positioning client portfolios to mitigate them, and timeless investing lessons investors would be wise to keep in mind. We encourage any clients or prospective clients who were unable to attend to watch the recording on our YouTube channel .
Thank you for your continued trust and for the privilege of growing your wealth alongside our own.
Michael P. McCloskey
President, Founder & Chief Investment Officer
Michael Van Loon
Associate Portfolio Manager
Fund Overview
The fund invests in a concentrated portfolio (15-20 stocks), primarily in equities from any sector and market capitalization.
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Testimonials
Don’t just take our word for it. See what our clients are saying:
“My wife and I began investing in GreensKeeper in 2023 after decades in mediocre mutual funds. After hearing Michael on a podcast, we were intrigued by his Value Investing strategy, and we like that our investments are in the same ones he puts his own family investments in. Michael and his team are very customer-focused and communicative. We are very glad to be a part of the GreensKeeper family and its growth and success.”
Doug S.
Vice President
“My family has known Michael for over 20 years, and we have invested in the Value Fund. He has a track record of success, and we sleep soundly at night knowing that he is growing our investments safely.”
Dr. Erin R.*
Anesthesiologist
“We began investing with GreensKeeper in 2013. A large portion of our three grandchildren’s education money is guided by Michael McCloskey and his patient advice. We have a long-term view towards investing and trust in the fund’s risk aversion strategy for preservation of capital. I recommend GreensKeeper to my friends and family.”
Timothy B.
President & CEO
The preceding testimonials are from current GreensKeeper client households with no compensation provided and may not be representative of the views of all people or investors. Certain testimonials were provided unsolicited, and others were provided by request. * Client household includes a GreensKeeper shareholder.
The GreensKeeper Team
Michael McCloskey
Founder & CIO
Michael Van Loon
Analyst & Assoc. Advising Rep.
James McCloskey
Private Client Sales
Michelle Tait
Executive Assistant
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Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
