Chemed (CHE) Fell due to Concerns Over Potential Medicare Cap Limits

Aristotle Capital Boston, LLC, an investment advisor, released its “Small Cap Equity Strategy” second quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter started with a risk-off environment from the previous quarter, but later regained momentum driven by broad-based elements. In the second quarter, the strategy delivered a return of 3.25% net of fees (3.41% gross of fees) underperforming the 8.50% total return of the Russell 2000 Index. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its second quarter 2025 investor letter, Aristotle Capital Small Cap Equity Strategy highlighted stocks such as Chemed Corporation (NYSE:CHE). Chemed Corporation (NYSE:CHE) is a company that provides hospice and palliative care services. The one-month return of Chemed Corporation (NYSE:CHE) was -18.03%, and its shares lost 17.28% of their value over the last 52 weeks. On July 22, 2025, Chemed Corporation (NYSE:CHE) stock closed at $452.87 per share, with a market capitalization of $6.625 billion.

Aristotle Capital Small Cap Equity Strategy stated the following regarding Chemed Corporation (NYSE:CHE) in its second quarter 2025 investor letter:

“Chemed Corporation (NYSE:CHE), engages in the provision of healthcare and maintenance services operating through two segments: VITAS and Roto-Rooter. The VITAS segment offers hospice and palliative care services to patients through a network of health care providers, social workers, clergy, and volunteers. The Roto-Rooter segment includes plumbing, drain cleaning, water restoration, and other related services to residential and commercial customers. The stock declined due to concerns surrounding the potential Medicare cap limits proposed in current legislation for its VITAS segment alongside weaker residential demand for its plumbing services segment. We continue to maintain our position, as we believe the slowing demand in the Roto-Rooter segment is transitory and the secular demand for hospice care remains strong.”

In another article, we covered Chemed Corporation (NYSE:CHE) and shared the list of best 52-week low stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.