Renaissance Investment Management, an investment management company, released its Q4 2025 “Small Cap Growth Strategy.” A copy of the letter can be downloaded here. In the fourth quarter, Small Cap Growth stocks posted their third consecutive quarter of gains, with the Russell 2000 Growth Index increasing by 1.2%. Both the Health Care and Real Estate sectors performed positively during this period. The Strategy maintains its preference for reasonably priced growth companies that demonstrate above-average growth potential and rising earnings estimates. The Renaissance Small Cap Growth Strategy underperformed the Index and experienced a decline in the quarter. The “low quality” rally that began in the second quarter persisted into the fourth quarter. Additionally, companies with negative earnings emerged as strong performers in the fourth quarter, achieving even greater gains than the lowest ROE stocks. Looking ahead to 2026, the Strategy remains optimistic about the positive environment for small-cap growth stocks. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Renaissance Small Cap Growth Strategy highlighted stocks like Stride, Inc. (NYSE:LRN). Stride, Inc. (NYSE:LRN) is an education management company that provides online education. On April 2, 2026, Stride, Inc. (NYSE:LRN) stock closed at $89.64 per share. One-month return of Stride, Inc. (NYSE:LRN) was 3.24%, and its shares lost 28.29% over the past 52 weeks. Stride, Inc. (NYSE:LRN) has a market capitalization of $3.93 billion.
Renaissance Small Cap Growth Strategy stated the following regarding Stride, Inc. (NYSE:LRN) in its fourth quarter 2025 investor letter:
“Stride, Inc. (NYSE:LRN), a provider of online education services, detracted the most from portfolio performance. The company upgraded its Learning Management System during the summer but suffered performance issues as students returned to school in the fall. Some students were unable to log into the system, which led them to leave the platform. This impacted on the company’s student enrollment growth, pushing revenues below expectations. We continue to monitor the situation, as the issue should be transient, and seek more clarity prior to making any further decisions about our position.”
Stride, Inc. (NYSE:LRN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 43 hedge fund portfolios held Stride, Inc. (NYSE:LRN) at the end of the fourth quarter, up from 39 in the previous quarter. While we acknowledge the risk and potential of Stride, Inc. (NYSE:LRN) 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 Stride, Inc. (NYSE:LRN) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Stride, Inc. (NYSE:LRN) and shared Loomis Sayles Small Cap Growth Fund’s views on the company. In addition, please check out our hedge fund investor letters Q4 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.
