TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the fund returned -9.41% (gross) and -9.64% (net), compared to a -11.12% return for the Russell 2000 Growth Index. There was a broad positive sentiment in the market at the beginning of 2025. Expectations for a pro-business and soft regulatory environment lifted global markets in January. However, delays and uncertainties surrounding U.S. policies led to a significant downturn in March. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, TimesSquare Capital U.S. Small Cap Growth Strategy highlighted stocks such as Cactus, Inc. (NYSE:WHD). Cactus, Inc. (NYSE:WHD) designs and manufactures pressure control and spoolable pipes. The one-month return of Cactus, Inc. (NYSE:WHD) was 8.66%, and its shares lost 12.64% of their value over the last 52 weeks. On June 20, 2025, Cactus, Inc. (NYSE:WHD) stock closed at $45.06 per share, with a market capitalization of $3.091 billion.
TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding Cactus, Inc. (NYSE:WHD) in its Q1 2025 investor letter:
“We often see the ebb and flow of the Energy sector tied to underlying commodity prices. Cactus, Inc. (NYSE:WHD), a manufacturer of highly engineered wellhead systems and pressure control equipment, retreated by -21%. Its shares were impacted by the combination of a slight miss to the latest quarter’s results along with weaker guidance for its spoolable/flexible pipe business. Another consideration for the stock is that they historically produced half of their pressure control equipment in China and the balance in Louisiana. In recognition of the tariff risk, management built out capacity in Vietnam last year. That facility, which can handle their full US and China product volume, will start ramping up in the second quarter.”
An oil and gas engineer looking at a production tree, inspecting its pressure control equipment.
Cactus, Inc. (NYSE:WHD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Cactus, Inc. (NYSE:WHD) at the end of the first quarter, which was 23 in the previous quarter. Cactus, Inc.’s (NYSE:WHD) Q1 revenues were $280 million, which were up 3% sequentially. While we acknowledge the potential of Cactus, Inc. (NYSE:WHD) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of WHD 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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Disclosure: None. This article is originally published at Insider Monkey.
