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 The Chefs’ Warehouse, Inc. (NASDAQ:CHEF). The Chefs’ Warehouse, Inc. (NASDAQ:CHEF) is a specialty food and center-of-the-plate products distributor. The one-month return of The Chefs’ Warehouse, Inc. (NASDAQ:CHEF) was -1.01%, and its shares gained 56.85% of their value over the last 52 weeks. On June 20, 2025, The Chefs’ Warehouse, Inc. (NASDAQ:CHEF) stock closed at $61.50 per share, with a market capitalization of $2.502 billion.
TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding The Chefs’ Warehouse, Inc. (NASDAQ:CHEF) in its Q1 2025 investor letter:
“Our preferences in the Consumer-oriented sectors lean toward value-oriented or specialty retailers, franchise models, or premium brands. The Chefs’ Warehouse, Inc. (NASDAQ:CHEF) is a specialty wholesale distributor serving restaurants, hotels, country clubs, and fine food stores. Their fourth quarter results were solid, and management cited growth opportunities in newer markets as well as category expansion. Management called out consistent demand strength across their customer base. We opportunistically added to the position when its shares pulled back in late March, though the stock still scored a 10% gain for the quarter.”
A farmer harvesting truffles in the countryside, ready to be shipped to customers.
The Chefs’ Warehouse, Inc. (NASDAQ:CHEF) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held The Chefs’ Warehouse, Inc. (NASDAQ:CHEF) at the end of the first quarter, which was 15 in the previous quarter. The Chefs’ Warehouse, Inc.’s (NASDAQ:CHEF) net sales increased approximately 8.7% in the first quarter to $950.7 million. While we acknowledge the potential of The Chefs’ Warehouse, Inc. (NASDAQ:CHEF) 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 another article, we covered The Chefs’ Warehouse, Inc. (NASDAQ:CHEF) and shared the list of best pizza stocks to buy according to hedge funds. 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 CHEF 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.
