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 Valvoline Inc. (NYSE:VVV). Headquartered in Lexington, Kentucky, Valvoline Inc. (NYSE:VVV) is a retail automotive services company. The one-month return of Valvoline Inc. (NYSE:VVV) was 8.92%, and its shares lost 13.07% of their value over the last 52 weeks. On June 20, 2025, Valvoline Inc. (NYSE:VVV) stock closed at $36.99 per share, with a market capitalization of $4.702 billion.
TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding Valvoline Inc. (NYSE:VVV) 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. Valvoline Inc. (NYSE:VVV), an operator and franchiser of vehicle service centers, slipped by -4%. Their fiscal first quarter revenues and profits beat Street projections due to improving transaction counts and better same store sales comparisons. They also announced the acquisition of Breeze Autocare, which operates 200 locations across 17 states. Though down, the stock outpaced the index sector average return of -17%.”
A close-up of a metal oil pump in an oil refinery, a key part of the company’s production.
Valvoline Inc. (NYSE:VVV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held Valvoline Inc. (NYSE:VVV) at the end of the first quarter, which was 36 in the previous quarter. While we acknowledge the potential of Valvoline Inc. (NYSE:VVV) 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 Valvoline Inc. (NYSE:VVV) and shared Aristotle Capital Small Cap Equity Strategy’s 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 VVV 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.
