Should You Continue to Hold ASGN Incorporated (ASGN)?

Baron Funds, an investment management company, released its “Baron Small Cap Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter of 2025, the fund was up 10.38%% (Institutional Shares) compared to the Russell 2000 Growth Index’s (the Index) 11.97% return. Year to date, the Fund is up 0.36% compared to the index’s (0.48)% return. Small-cap stocks recovered well during the quarter and performed in line with the overall market but have significantly trailed larger-cap stocks this year. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Baron Small Cap Fund highlighted stocks such as ASGN Incorporated (NYSE:ASGN). Based in Glen Allen, Virginia, ASGN Incorporated (NYSE:ASGN) is an information technology services and professional solutions provider in the technology, digital, and creative fields. The one-month return of ASGN Incorporated (NYSE:ASGN) was 1.94%, and its shares lost 43.19% of their value over the last 52 weeks. On August 8, 2025, ASGN Incorporated (NYSE:ASGN) stock closed at $49.44 per share, with a market capitalization of $2.165 billion.

Baron Small Cap Fund stated the following regarding ASGN Incorporated (NYSE:ASGN) in its second quarter 2025 investor letter:

“ASGN Incorporated (NYSE:ASGN) is the second largest staffing firm in the U.S., providing IT and professional services across the technology, digital, and creative fields for both commercial and government clients. Customers remain cautious with spending and hesitant to initiate new IT projects without greater clarity on the economic outlook. Earnings per share guidance for the second quarter came in roughly 12% below consensus, reflecting flat revenue expectations and margin pressure tied to the loss of Department of Government Efficiency business and a higher mix of lower-margin federal contracts. Consulting services grew nearly 5% organically and now represent approximately 61% of total revenue, up 400 basis points year-over-year, and that book of business, in our opinion, is worth a higher multiple. We continue to believe that ASGN is well positioned to meet the IT needs of its clients as demand normalizes over time and that the stock is cheap.”

A finance executive tapping away on a digital tablet, demonstrating the company’s digital innovation.

ASGN Incorporated (NYSE:ASGN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held ASGN Incorporated (NYSE:ASGN) at the end of the first quarter, which was 24 in the previous quarter. In the second quarter of 2025, ASGN Incorporated (NYSE: ASGN) reported revenues of $1.02 billion, which represents a 1.4% decrease year-over-year; however, it surpassed guidance expectations. While we acknowledge the risk and potential of ASGN Incorporated (NYSE:ASGN) 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 ASGN Incorporated (NYSE:ASGN) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered ASGN Incorporated (NYSE:ASGN) and shared the list of best beaten down stocks to buy according to analysts. 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.