Fred Alger Management, an investment management company, released its “Alger Weatherbie Specialized Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equities experienced increased volatility in the first quarter due to changing fiscal, monetary, and trade policies. Uncertainty arose from the emergence of advanced AI models from China. Against this backdrop, Class A shares of the fund underperformed the Russell 2500 Growth Index in the quarter. The Consumer Discretionary and Industrials sectors contributed to the fund’s performance in the quarter, while Health Care and Information Technology detracted. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Alger Weatherbie Specialized Growth Fund highlighted stocks such as VSE Corporation (NASDAQ:VSEC). VSE Corporation (NASDAQ:VSEC) is a diversified aftermarket products and services company that operates through Aviation and Fleet. The one-month return of VSE Corporation (NASDAQ:VSEC) was 2.42%, and its shares gained 63.96% of their value over the last 52 weeks. On June 17, 2025, VSE Corporation (NASDAQ:VSEC) stock closed at $134.45 per share, with a market capitalization of $2.779 billion.
Alger Weatherbie Specialized Growth Fund stated the following regarding VSE Corporation (NASDAQ:VSEC) in its Q1 2025 investor letter:
“VSE Corporation (NASDAQ:VSEC) provides repair services, parts distribution, logistics, supply chain management, and consulting for commercial and government transportation assets across land, sea, and air. Historically operating in two primary segments—Aviation and Fleet—the company recently announced the planned divestiture of its Fleet operations. During the quarter, shares positively contributed to performance following the announcement of the planned sale of its Fleet segment, Wheeler Fleet Solutions, to a private equity firm, enabling VSE to concentrate further on its core aviation business. Additionally, VSE reported strong fiscal fourth-quarter results, exceeding analyst earnings estimates. Organic revenue growth in the Aviation segment accelerated to 17%, compared to 14% in the prior quarter. Further, management noted that they anticipate continued growth in 2025, driven by successful integration of recent acquisitions, a robust pipeline of organic opportunities, and potential future acquisitions. We believe management is effectively executing its strategic plan, forecasting sustained organic growth through 2025 and into 2026, which could potentially support further margin improvement.”
A close-up of a technician’s hands assembling parts for a commercial aircraft.
VSE Corporation (NASDAQ:VSEC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held VSE Corporation (NASDAQ:VSEC) at the end of the first quarter, which was 17 in the previous quarter. VSE Corporation’s (NASDAQ:VSEC) first quarter revenue increased 58% year-over-year to $256 million. While we acknowledge the potential of VSE Corporation (NASDAQ:VSEC) 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 VSE Corporation (NASDAQ:VSEC) and shared Loomis Sayles Small Cap Value Fund’s views on the company. 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 VSEC 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.
