Prosper Stars & Stripes, a long/short equity fund, recently released its first quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund underperformed and generated a net return of -9.7% compared to a total return of -9.5% for the long-only small cap Russell 2000 Index (the “Russell”), and a total return of 0.2% for the long/short equity hedge fund peer group represented by the HFRX Equity Hedge Index (the “HFRX”). A combination of factors led the composite to underperform compared to its net exposure at the start of the year. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Prosper Stars & Stripes Fund highlighted stocks such as Repligen Corporation (NASDAQ:RGEN). Repligen Corporation (NASDAQ:RGEN) develops and distributes bioprocessing technologies and systems. The one-month return of Repligen Corporation (NASDAQ:RGEN) was 3.79%, and its shares gained 4.52% of their value over the last 52 weeks. On June 12, 2025, Repligen Corporation (NASDAQ:RGEN) stock closed at $131.30 per share, with a market capitalization of $7.377 billion.
Prosper Stars & Stripes Fund stated the following regarding Repligen Corporation (NASDAQ:RGEN) in its Q1 2025 investor letter:
With the above factors in mind, the Composite strives to use periods of market dislocation to reinvest in some of the high-quality stocks that we monitor on our focus list for attractive entry points. One such stock is Repligen Corporation (NASDAQ:RGEN). The company is a global supplier of hardware and consumables to pharmaceutical, biotechnology, and contract drug manufacturing organizations (“CDMOs”). Repligen is a “picks & shovels” provider of essential tools to the life sciences industry; approximately 80% of the products it sells are consumables. The bioprocessing industry historically grows consistently between 8-12% per year. Repligen is seen as an innovator across key areas of the upstream and downstream value chain in drug development, and we believe approximately 80% of the company’s portfolio has little to no real competition. Since the consumables it sells typically represent less than 5% of the total cost to manufacture a biologic, Repligen enjoys strong pricing power. The life science tools (“LST”) industry experienced several headwinds over the past two years from post-COVID de-stocking and slowing sales in China. However, more recently, there have been green shoots as Repligen’s pharma and consumable orders have increased mid-to-high teens. In addition, there were near-record 64 new drug approvals in 2024. The post-COVID hangover appears to be coming to an end; we believe Repligen’s sales can accelerate to 15+% in 2025. We believe this growth would be accompanied by at least 100 basis points (“bps”) of margin expansion and strong free cash flow. Recent reports from peers including Danaher and Satorius support the view that trends are improving. Further, the desire to add domestic capacity for drug manufacturing is a medium to long term catalyst that will support growth rates. Repligen has high visibility and accelerating revenues and profits and we anticipate meaningful upside to ~$180 price based on a 10x EV/S multiple.”
A technician in a lab inspecting an ELISA test kit for use in biopharmaceutical diagnostics.
Repligen Corporation (NASDAQ:RGEN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held Repligen Corporation (NASDAQ:RGEN) at the end of the first quarter, which was 34 in the previous quarter. Repligen Corporation (NASDAQ:RGEN) delivered first-quarter revenue of $169 million, marking an increase of 10% from Q1 2024. While we acknowledge the potential of Repligen Corporation (NASDAQ:RGEN) 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 Repligen Corporation (NASDAQ:RGEN) and shared Conestoga Capital Advisors’ views on the company. 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 RGEN 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.
