Polen Capital, an investment management company, released its “Polen U.S. Small Company Growth Strategy” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q1 2025, optimism fueled by the Trump election shifted to fear and uncertainty due to apprehension about cost-cutting measures and emerging trade policies. In the first quarter, the fund delivered -10.53% gross, and -10.83% net of fees, compared to a -11.12% return for the Russell 2000 Growth Index. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2025.
In its first-quarter 2025 investor letter, Polen U.S. Small Company Growth Strategy highlighted stocks such as Fox Factory Holding Corp. (NASDAQ:FOXF). Fox Factory Holding Corp. (NASDAQ:FOXF) designs, engineers, manufactures, and markets performance-defining products and systems. The one-month return of Fox Factory Holding Corp. (NASDAQ:FOXF) was 38.83%, and its shares lost 44.22% of their value over the last 52 weeks. On May 13, 2025, Fox Factory Holding Corp. (NASDAQ:FOXF) stock closed at $26.33 per share, with a market capitalization of $1.115 billion.
Polen U.S. Small Company Growth Strategy stated the following regarding Fox Factory Holding Corp. (NASDAQ:FOXF) in its Q1 2025 investor letter:
“By contrast, we eliminated three positions-Fox Factory Holding Corp. (NASDAQ:FOXF), Topgolf Callaway, and Yeti Holdings-and trimmed several existing positions. Many of the sells and trims were in the Consumer Discretionary sector, where we believe there is currently more vulnerability to tariff uncertainty and economic dislocation.
Fox Factory, a manufacturer of high-end shocks for bicycles and powered vehicles, has been an unsuccessful investment for us. Fox Factory initially seemed well-positioned to benefit from growing recreational and outdoor activities. However, the company faced significant challenges during our holding period. While pandemic related bicycle supply chain disruptions severely impacted operations, and though these headwinds largely abated, additional weakness has emerged in its powered vehicle segment due to growing dealer inventories and ongoing issues at auto OEMs. While we think Fox Factory will likely weather this difficult period, in our view, it no longer represents the best opportunity for our capital, particularly given other compelling ideas with growth and quality prospects. As such, we exited the position to help fund new positions that we believe will better contribute to the Portfolio’s long-term performance.”
A cyclist in full gear on their mountain bike, the Performance Cycling Components visible.
Fox Factory Holding Corp. (NASDAQ:FOXF) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held Fox Factory Holding Corp. (NASDAQ:FOXF) at the end of the fourth quarter which was 12 in the previous quarter. Fox Factory Holding Corp. (NASDAQ:FOXF) reported solid first quarter with sales increasing 6.5% year-over year, reaching $355 million. While we acknowledge the potential of Fox Factory Holding Corp. (NASDAQ:FOXF) 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 cheapest AI stock.
In another article, we covered Fox Factory Holding Corp. (NASDAQ:FOXF) and shared Conestoga Capital Advisors’ 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.
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Disclosure: None. This article is originally published at Insider Monkey.
