Polen Capital, an investment management company, released its “Polen Focus Growth Strategy” second quarter 2025 investor letter. A copy of the letter can be downloaded here. The market sentiment shifted in the second quarter, from a sharp decline to a V-shaped recovery. In the second quarter, the strategy returned 9.36% (gross) and 9.15% (net) compared to 17.84% for the Russell 1000 Growth Index and 10.94% for the S&P 500 Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its second quarter 2025 investor letter, Polen Focus Growth Strategy highlighted stocks such as IDEXX Laboratories, Inc. (NASDAQ:IDXX). IDEXX Laboratories, Inc. (NASDAQ:IDXX) develops, manufactures, and distributes products primarily for the companion animal veterinary, livestock and poultry, dairy, and water testing markets. The one-month return of IDEXX Laboratories, Inc. (NASDAQ:IDXX) was -0.72%, and its shares gained 9.59% of their value over the last 52 weeks. On July 21, 2025, IDEXX Laboratories, Inc. (NASDAQ:IDXX) stock closed at $520.87 per share, with a market capitalization of $41.889 billion.
Polen Focus Growth Strategy stated the following regarding IDEXX Laboratories, Inc. (NASDAQ:IDXX) in its second quarter 2025 investor letter:
“In the second quarter, we initiated a new position in IDEXX Laboratories, Inc. (NASDAQ:IDXX) and eliminated our positions in Apple and UnitedHealth Group. IDEXX Labs is a global leader in pet diagnostics, offering in-clinic diagnostics (razor and razor blade consumables) and out-of-clinic reference labs. We have researched the business for two decades and admired its durable competitive advantages, highly recurring and profitable business model, attractive runway, supported by tailwinds from pet ownership and the “humanization of pets,” and strong execution by its management team. IDEXX employs a successful “surround the customer” strategy by offering diagnostic tests across many modalities, along with imaging and veterinary practice management software. With a dominant market share in pet diagnostic tests, IDEXX continues to expand its addressable market by innovating new types of testing and creating additional revenue streams for its veterinary customers. We envision years of continued innovation and market expansion, with minimal competitive threats.
Historically, we questioned IDEXX’s persistently high valuation. However, the recent, transitory business slowdown—driven by fewer vet clinic visits as COVID-era pets remain relatively young— has made the valuation more attractive. We believe the company’s long-term outlook remains largely unchanged. As these pets approach 6-7 years of age, their vet care needs will increase, supporting our expectation for sustained double-digit organic revenue growth and mid-to-high teens EPS growth. Even with EPS growth at least in line with the portfolio average, we expect IDEXX to also exhibit safety-like characteristics due to its unique competitive position, recurring revenues, and loyal shareholder base.”
A veterinarian in a veterinary clinic examining a companion animal.
IDEXX Laboratories, Inc. (NASDAQ:IDXX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held IDEXX Laboratories, Inc. (NASDAQ:IDXX) at the end of the first quarter, which was 58 in the previous quarter. In the first quarter of 2025, IDEXX Laboratories, Inc. (NASDAQ:IDXX) reported organic revenue growth of 5% driven by 4.5% organic revenue gains in the CAG business, 7% organic growth in water, and 4% organic growth in LPD. While we acknowledge the risk and potential of IDEXX Laboratories, Inc. (NASDAQ:IDXX) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than IDEXX Laboratories, Inc. (NASDAQ:IDXX) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered IDEXX Laboratories, Inc. (NASDAQ:IDXX) and shared Macquarie Large Cap Growth Fund’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 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.
