Baron Funds, an investment management company, released its “Baron Discovery Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund was down 6.17% (Institutional Shares), outperforming the -11.12% return for the Russell 2000 Growth Index. The market began strong in February but faded due to Trump’s serious tariff enactment, which the market perceives as inflationary and slowing economic growth. The decline accelerated after April 2nd, causing fears of a trade war and global recession. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Baron Discovery Fund highlighted stocks such as Montrose Environmental Group, Inc. (NYSE:MEG). Montrose Environmental Group, Inc. (NYSE:MEG) is an environmental services company. The one-month return of Montrose Environmental Group, Inc. (NYSE:MEG) was 37.40%, and its shares lost 60.50% of their value over the last 52 weeks. On May 16, 2025, Montrose Environmental Group, Inc. (NYSE:MEG) stock closed at $19.36 per share with a market capitalization of $662.426 million.
Baron Discovery Fund stated the following regarding Montrose Environmental Group, Inc. (NYSE:MEG) in its Q1 2025 investor letter:
“Montrose Environmental Group, Inc. (NYSE:MEG), a leading environmental solutions company, detracted from performance during the quarter. This was due to concerns that the Environmental Protection Agency (EPA) under the Trump administration will reduce enforcement of environmental regulations that require the type of consulting, testing, remediation and monitoring that Montrose provides. We believe these concerns are misguided, and that given its current high single-digit multiple of cash flow, Montrose is hugely underpriced. Montrose’s business is driven by state regulations as well as contaminants that have a long-regulated history with bipartisan support (including from the current EPA Administrator). Montrose has successfully grown through both Democratic and Republican administrations (including the first Trump administration), and the company believes the Trump administration’s initiatives on cost efficiency, U.S. manufacturing, and domestic energy production could create large new opportunities for the company.”
A biohazard waste disposal team safely transferring contaminated water for treatment.
Montrose Environmental Group, Inc. (NYSE:MEG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held Montrose Environmental Group, Inc. (NYSE:MEG) at the end of the fourth quarter, compared to 18 in the third quarter. Montrose Environmental Group, Inc.’s (NYSE:MEG) first quarter revenue increased 14.5% to $177.8 million. While we acknowledge the potential of Montrose Environmental Group, Inc. (NYSE:MEG) 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 Montrose Environmental Group, Inc. (NYSE:MEG) and shared billionaire Ken Fisher’s industrial stock picks with huge upside potential. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
