Wireless Segment Drag Weighed On Dycom Industries (dy)

Reaves W H & Co Inc released its third-quarter 2026 investor letter for “Reaves Long-Term Value Strategy”. The letter can be downloaded here. The Reaves Long-Term Value Wrap Composite saw an 11.83% decline before fees in Q3, underperforming the MSCI USA Infrastructure Index’s -5.73%, though it gained 7.88% in the first nine months of 2026, outperforming the index. The weighted average cash distributions from portfolio companies rose by 6.5% compared to Q3 2025. The challenging macroeconomic landscape, characterized by rising Treasury yields and tight monetary policy, impacted performance, especially for interest-sensitive holdings. However, the overall growth outlook improved, with several companies raising guidance despite stagnant share prices. Investment in AI infrastructure expanded, enhancing opportunities across sectors, while increased electricity demand supports growth in infrastructure investments. The focus remains on long-term earnings potential, aiming to identify undervalued companies amidst these durable growth opportunities. Also, check the strategy’s top five holdings to see its best picks in 2026.

In its Q3 2026 investor letter, Reaves Long-Term Value Strategy highlighted Dycom Industries, Inc. (NYSE:DY). Dycom Industries, Inc. (NYSE:DY), a leading infrastructure services company that provides services to the digital infrastructure, telecommunications infrastructure, and utility industries, detracted from the fund’s performance this quarter. On October 14, 2026, Dycom Industries, Inc. (NYSE:DY) closed at $259.96 per share. Over the past month, Dycom Industries, Inc. (NYSE:DY) declined 8.94%, and its shares are down 12.01% over the past year. Dycom Industries, Inc. has a market capitalization of $7.84 billion, and its stock has traded within a 52-week range of $258.00 and 566.47.

Reaves Long-Term Value Strategy stated the following regarding Dycom Industries, Inc. (NYSE:DY) in its Q3 2026 investor letter:

“Dycom Industries, Inc. (NYSE:DY): Dycom shares weakened after a major wireless customer temporarily paused spending, although the segment represents a relatively small portion of the company’s business. Strong spending across its core customers allowed management to largely maintain guidance. We view the pause as a timing issue, while demand for fiber-to-the-home and middle-mile deployments remains strong. Data center fiber and electrical construction are continuing to become larger contributors to growth. We believe these trends provide a favorable setup heading into 2027.”

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Dycom Industries, Inc. (NYSE:DY) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 68 hedge fund portfolios held Dycom Industries, Inc. (NYSE:DY) at the end of the second quarter, which was 52 in the previous quarter. While we acknowledge the potential of Dycom Industries, Inc. (NYSE:DY) 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.

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Should you invest in DY now?

In another article, we discussed Dycom Industries, Inc. (NYSE:DY) and shared a list of fastest-growing grid construction stocks to buy. Dycom Industries, Inc. (NYSE:DY) contributed positively to the Strategy’s performance in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2026 page for more investor letters from hedge funds and other leading investors.

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This article is originally published at Insider Monkey.