Renaissance Investment Management, an investment management company, released its Q1 2025 “Small Cap Growth Strategy” investor letter. A copy of the letter can be downloaded here. The S&P 500 has not seen a “correction” since 2023, yet such events are usual every two years. While the firm continues to identify solid investment opportunities, especially in high-quality, fairly priced stocks that have lagged major market indices for several years. As uncertainty around the impact of the economic policies of President Trump weighed on sentiment, the Russell 2000 Growth Index declined in the quarter. While the strategy also declined in the quarter but outperformed the index. For more information on the fund’s best picks in 2025, please check its top five holdings.
In its first-quarter 2025 investor letter, Renaissance Investment Management Small Cap Growth Strategy highlighted stocks such as Hims & Hers Health, Inc. (NYSE:HIMS). Hims & Hers Health, Inc. (NYSE:HIMS) offers a telehealth platform that connects consumers to licensed healthcare professionals. The one-month return of Hims & Hers Health, Inc. (NYSE:HIMS) was 5.29%, and its shares gained 146.35% of their value over the last 52 weeks. On June 18, 2025, Hims & Hers Health, Inc. (NYSE:HIMS) stock closed at $61.07 per share, with a market capitalization of $13.669 billion.
Renaissance Investment Management Small Cap Growth Strategy stated the following regarding Hims & Hers Health, Inc. (NYSE:HIMS) in its Q1 2025 investor letter:
“Hims & Hers Health, Inc. (NYSE:HIMS) contributed the most to performance for the first quarter, as the company was a large beneficiary of the shortage of GLP-1 weight loss drugs. At its peak in February, the stock had gained more than 150% for the quarter. During the run-up, we reduced our position size on more than one occasion. However, later in the quarter, the FDA announced the shortage of the weight loss drugs was over, making HIMS ineligible to continue to offer commercial dosages through its platform. The company still expects revenues to grow by over 50% this year, as it will continue to offer personalized weight loss compounds that include GLP-1.”
A nurse in a telehealth platform talking with a patient on video call for consultation.
Hims & Hers Health, Inc. (NYSE:HIMS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held Hims & Hers Health, Inc. (NYSE:HIMS) at the end of the first quarter, which was 38 in the previous quarter. Hims & Hers Health, Inc.’s (NYSE:HIMS) first quarter revenue increased 111% year-over-year to $586 million. While we acknowledge the potential of Hims & Hers Health, Inc. (NYSE:HIMS) 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 Hims & Hers Health, Inc. (NYSE:HIMS) and shared the list of best healthcare stocks to buy. 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 HIMS 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.
