Loomis Sayles Small Cap Value Fund Trimmed VSE Corporation (VSEC) as it Reached Assessed Fair Value

Loomis Sayles, an investment management company, released its “Small Cap Value Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The first quarter of 2025 saw negative returns for US equity markets, with large-cap indices outperforming small caps. Value stocks were stronger than growth stocks, driven by strong performance in financials and real estate, while growth sectors struggled. In the first quarter, the fund returned 0.16%, outperforming the Russell 2000 Value Index’s -1.06% return. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Loomis Sayles Small Cap Value 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 5.39%, and its shares gained 69.23% of their value over the last 52 weeks. On June 11, 2025, VSE Corporation (NASDAQ:VSEC) stock closed at $138.28 per share, with a market capitalization of $2.858 billion.

Loomis Sayles Small Cap Value Fund stated the following regarding VSE Corporation (NASDAQ:VSEC) in its Q1 2025 investor letter:

“VSE Corporation (NASDAQ:VSEC) provides repair services and parts distribution for commercial aircraft, business jets and military industries. The aging commercial aircraft fleet and new aircraft production shortages are significant tailwinds to this business, as the existing fleet of aircraft remain in service for longer, requiring more frequent repairs and replacement parts. VSE management has also made several strategic acquisitions over the course of the nearly four years the Fund has held the stock. During the first quarter, VSE reported a strong, upside surprise to earnings estimates while also finalizing the divestiture of the last, non-core business segment in the company portfolio. After a strong upward move in the stock price following the news, we reduced our position in the portfolio as the stock has moved closer to our assessment of fair value.”

Why VSE Corp (VSEC) Is Surging In 2025?

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% 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 aerospace stocks surging in 2025. 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.