1 Main Capital, a boutique investment firm, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned (3.6)% net in the first quarter compared to (4.3)% and (9.5)% for the S&P 500 (SPX) and Russell 2000 (RTY). Since its inception in February 2018, the fund has returned annualized net returns of 19.5%, compared to 11.9% and 4.8% for the indexes. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2025.
In its first-quarter 2025 investor letter, 1 Main Capital highlighted stocks such as Third Harmonic Bio, Inc. (NASDAQ:THRD). Third Harmonic Bio, Inc. (NASDAQ:THRD) is a biopharmaceutical company. The one-month return of Third Harmonic Bio, Inc. (NASDAQ:THRD) was 48.28%, and its shares lost 55.90% of their value over the last 52 weeks. On May 1, 2025, Third Harmonic Bio, Inc. (NASDAQ:THRD) stock closed at $5.16 per share with a market capitalization of $232.76 million.
1 Main Capital stated the following regarding Third Harmonic Bio, Inc. (NASDAQ:THRD) in its Q1 2025 investor letter:
“Third Harmonic Bio, Inc. (NASDAQ:THRD) came public in 2022, and its shares quickly came under pressure after the company reported that THB001, its primary drug, caused liver toxicity issues in trials. In February 2025, phase 1 data for another pipeline asset, THB335 (“335”), also disappointed investors.
Concurrent to releasing the 335 results, THRD halted all non-335 research, fired 50% of its workforce, and initiated a strategic review, saying “we have to consider our responsibility to our shareholders and our ability to build value over a reasonable time horizon…given the recent market dynamics around our stock, we believe that solely relying on the progress of 335 to build value is an inefficient approach.”
On the same day, THRD guided to a 6/30/25 estimated net cash balance of >$5 per share with nearly no liabilities, at which point the Fund bought shares at $3.45. In mid-April the company announced it would dissolve itself and return all its cash to shareholders. We then exited at $5.”
A close-up of a microscope, revealing the details of a small-molecule KIT inhibitor.
Third Harmonic Bio, Inc. (NASDAQ:THRD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held Third Harmonic Bio, Inc. (NASDAQ:THRD) at the end of the fourth quarter, compared to 16 in the third quarter. While we acknowledge the potential of Third Harmonic Bio, Inc. (NASDAQ:THRD) 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 cheapest AI stock.
In addition, please check out our hedge fund investor letters Q1 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.