Headwaters Capital Management, an investment management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The portfolio bounced back from the first quarter uncertainty and, like the rest of the market, experienced a strong rebound after the tariff-induced sell-off at the start of the quarter. The portfolio gained +7.5% (+7.3% net) in the quarter compared to a +8.5% gain for the Russell Mid Cap Index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its second quarter 2025 investor letter, Headwaters Capital Management highlighted stocks such as Bio-Techne Corporation (NASDAQ:TECH). Bio-Techne Corporation (NASDAQ:TECH), with a market capitalization of $8.249 billion, develops, manufactures, and sells life science reagents, instruments, and services for the research and clinical diagnostic markets. The one-month return of Bio-Techne Corporation (NASDAQ:TECH) was 6.30%, and its shares lost 34.08% of their value over the last 52 weeks. On July 14, 2025, Bio-Techne Corporation (NASDAQ:TECH) stock closed at $52.62 per share.
Headwaters Capital Management stated the following regarding Bio-Techne Corporation (NASDAQ:TECH) in its second quarter 2025 investor letter:
“Buy: Bio-Techne Corporation (NASDAQ:TECH): A new position was added early in July and will be detailed in the Q3 letter. Summary Thesis: 1) Market leading life sciences reagents and instrument company. Recurring consumable revenue, strong profit margins, healthy free cash flow and a net cash position. 2) Concern around US academic funding is weighing on shares of TECH, pressuring the stock to its lowest valuation since 2017. 3) Revenue growth rate inflecting higher in FY ’27 (6/30 FYE) as Company laps one-time NIH budget reset and growth assets propel consolidated revenue. 4) Coveted asset as evidenced by recent M&A transactions, which supports a significantly higher valuation than implied by current share price.
Bio-Techne (“TECH”) develops, manufactures and sells life science reagents, instruments and services for the research, pharmaceutical, diagnostics and bioprocessing markets worldwide. Founded in 1976 as Research and Diagnostic Systems, the company IPO’d in 1985 when it merged with Techne Corporation. TECH has been a leader in manufacturing high-quality antibodies and proteins used in life sciences research. The Company also manufactures instruments that utilize these reagents, creating a razor/razor blade model. In 2013, the Company embarked on a strategy to accelerate revenue growth by utilizing cash flow from its Protein Sciences business to acquire higher growth products leveraged to its existing customer base. Today, 80% of the company’s revenues are consummables, driving highly recurring revenue for the company. Customer concentration is minimal given TECH’s broad product and customer base. Today, the Company operates in two segments: Protein Sciences and Diagnostics & Genomics…” (Click here to read the full text)
A cutting-edge laboratory with technicians in white coats studying a POC device.
Bio-Techne Corporation (NASDAQ:TECH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Bio-Techne Corporation (NASDAQ:TECH) at the end of the first quarter, which was 24 in the previous quarter. In the fiscal second quarter of 2025, Bio-Techne Corporation (NASDAQ:TECH) generated $316.2 million in revenues, up 6% year-over-year on an organic basis and 4% on reported basis. While we acknowledge the risk and potential of TECH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TECH and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Bio-Techne Corporation (NASDAQ:TECH) and shared the list of best S&P 500 stocks with huge upside potential. 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.
