Should You Invest in Penumbra (PEN)?

Baron Funds, an investment management company, released its “Baron Health Care Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund declined 5.06% (Institutional Shares) in the quarter, against a challenging backdrop for the broader Health Care sector, compared to a 6.19% decline for the Russell 3000 Health Care Index (benchmark) and a 10.99% gain for the Russell 3000 Index (the 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, Baron Health Care Fund highlighted stocks such as Penumbra, Inc. (NYSE:PEN). Headquartered in Alameda, California, Penumbra, Inc. (NYSE:PEN) designs and manufactures medical devices. The one-month return of Penumbra, Inc. (NYSE:PEN) was 1.25%, and its shares gained 48.44% of their value over the last 52 weeks. On July 30, 2025, Penumbra, Inc. (NYSE:PEN) stock closed at $254.21 per share, with a market capitalization of $9.914 billion.

Baron Health Care Fund stated the following regarding Penumbra, Inc. (NYSE:PEN) in its second quarter 2025 investor letter:

“We added to our position in Penumbra, Inc. (NYSE:PEN), a medical device company that manufactures mechanical thrombectomy devices to remove clots. We think Penumbra’s products are differentiated because of their computer assisted vacuum thrombectomy (CAVT) technology. CAVT utilizes algorithms to modulate the aspiration power depending on if a clot is detected, and to control a separate valve that injects saline to reduce friction between the clot and catheter. This maximizes clot removal while decreasing risk of blood loss. For U.S. thrombectomy, we see a market opportunity for over 1 million procedures a year across stroke and peripheral vascular, with a total addressable market (TAM) north of $8 billion. Of this TAM, Penumbra is only high single digits percentage penetrated in 2024. We are looking forward to this mechanism rolling out in the stroke setting (the Thunderbolt product which is in development). In addition, the company is seeing strong momentum in the venous setting already with their Flash product. We think this momentum could accelerate if the Storm-PE trial, which completed enrollment during the quarter, demonstrates superiority of Penumbra’s CAVT plus anticoagulation versus anticoagulation alone (the current standard of care) in intermediate-high risk pulmonary embolism patients. The trial could change the treatment paradigm for pulmonary embolism.”

In another article, we covered Penumbra, Inc. (NYSE:PEN) and shared the list of best mid-cap healthcare stocks to buy according to hedge funds. Baron Health Care Fund initiated a position in Penumbra, Inc. (NYSE:PEN) during Q1 2025. 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.