Polen Capital, an investment management company, released its “Polen Focus Growth Strategy” first quarter 20245 investor letter. A copy of the letter can be downloaded here. 2025 started following the best two-year stretch ever for the Russell 1000 Growth Index, with a return of +90% largely driven by the AI infrastructure narrative. The Trump victory and pro-business agenda boosted optimism, leading to a 7% rally. However, the first wave of Trump tariffs disrupted the global order, causing uncertainty to spike to levels comparable to COVID-19. The Russell 1000 Index concentration, which had previously been a tailwind to Index returns, was now weighing down. In the first quarter, the strategy returned -6.07% (gross) and -6.25% (net) compared to -9.97% for the Russell 1000 Growth Index and -4.27% 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 first-quarter 2025 investor letter, Polen Focus Growth Strategy highlighted stocks such as Starbucks Corporation (NASDAQ:SBUX). Starbucks Corporation (NASDAQ:SBUX) is a global coffee brand that roasts, markets, and sells coffee. The one-month return of Starbucks Corporation (NASDAQ:SBUX) was 6.32%, and its shares gained 11.30% of their value over the last 52 weeks. On May 15, 2025, Starbucks Corporation (NASDAQ:SBUX) stock closed at $86.65 per share with a market capitalization of $99.16 billion.
Polen Focus Growth Strategy stated the following regarding Starbucks Corporation (NASDAQ:SBUX) in its Q1 2025 investor letter:
“We have initiated a position in Starbucks Corporation (NASDAQ:SBUX)—formerly held in Focus Growth from 2010 through January 2022—now that new CEO Brian Niccol (formerly of Chipotle) has laid out a turnaround plan for the company that we view as multi-pronged, sensible, and achievable. We believe Starbucks became overly complex at the store level, which led to over-tasked baristas and a worsening customer experience. Niccol was instrumental in guiding Chipotle through its recovery from an E. coli scare several years ago, and we believe he is the best leader for Starbucks at this moment as well. He has identified many fixes for in-store operations, marketing, and customer service that we believe can be implemented and have a meaningful impact in the not-too distant future, even though these improvements will need to be rolled out to 17,000 U.S. stores. Starbucks remains an aspirational brand with a loyal customer base. Once store operations and experience are improved, we see meaningful growth ahead through store productivity, new-store growth, and very significant margin expansion. Tariffs should not have a major impact on Starbucks’ sourcing of coffee, and while a recession could dampen demand somewhat, we believe the turnaround will more than offset any economic impact.”
A close-up of a freshly roasted coffee bean, accompanied by a vintage aluminum scoop.
Starbucks Corporation (NASDAQ:SBUX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 84 hedge fund portfolios held Starbucks Corporation (NASDAQ:SBUX) at the end of the fourth quarter compared to 76 in the third quarter. In the second quarter of 2025, Starbucks Corporation (NASDAQ:SBUX) reported consolidated revenue of $8.8 billion, up 3% in constant currency compared to the prior year. While we acknowledge the potential of Starbucks Corporation (NASDAQ:SBUX) 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 Starbucks Corporation (NASDAQ:SBUX) and shared the list of most crowded hedge fund stocks that are targeted by short sellers. 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.
