TimesSquare Capital Management, an equity investment management company, released its “U.S. Mid Cap Growth Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. At the beginning of 2025, a general sense of optimism prevailed among businesses and markets. The expectations for a pro-business atmosphere with reduced regulatory burdens boosted global markets in January. However, in February, delays and uncertainties surrounding U.S. policies led to a more cautious market response, culminating in a significant decline in March. In this environment, the strategy returned -3.29% (gross) and -3.48% (net) while the Russell Midcap Growth Index returned -7.12%. 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. Mid Cap Growth Strategy highlighted stocks such as Hexcel Corporation (NYSE:HXL). Hexcel Corporation (NYSE:HXL) manufactures carbon fibers, structural reinforcements, honeycomb structures, resins, and composite materials and parts for commercial aerospace, space and defense, and industrial applications. The one-month return of Hexcel Corporation (NYSE:HXL) was 4.40%, and its shares lost 15.68% of their value over the last 52 weeks. On June 18, 2025, Hexcel Corporation (NYSE:HXL) stock closed at $54.36 per share, with a market capitalization of $4.37 billion.
TimesSquare Capital U.S. Mid Cap Growth Strategy stated the following regarding Hexcel Corporation (NYSE:HXL) in its Q1 2025 investor letter:
“During the quarter, we began buying shares in Hexcel Corporation (NYSE:HXL), a manufacturer of composite materials for aerospace, commercial and industrial uses worldwide. The initial recovery in aircraft production should provide original equipment manufacturer (OEM) suppliers with a secular tailwind. As the largest OEM of aerospace-grade carbon fiber used in the newer Airbus and Boeing planes, we expect Hexcel to benefit as production levels rise.”
An engineer inspecting the assembly of an aircraft wing, intricately designed components in the background.
Hexcel Corporation (NYSE:HXL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Hexcel Corporation (NYSE:HXL) at the end of the first quarter, which was 30 in the previous quarter. While we acknowledge the potential of Hexcel Corporation (NYSE:HXL) 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 Hexcel Corporation (NYSE:HXL) and shared the list of best mid cap defense stocks to buy according to analysts. 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 HXL 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.
