TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the fund returned -9.41% (gross) and -9.64% (net), compared to a -11.12% return for the Russell 2000 Growth Index. There was a broad positive sentiment in the market at the beginning of 2025. Expectations for a pro-business and soft regulatory environment lifted global markets in January. However, delays and uncertainties surrounding U.S. policies led to a significant downturn in March. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, TimesSquare Capital U.S. Small Cap Growth Strategy highlighted stocks such as Magnolia Oil & Gas Corporation (NYSE:MGY). Magnolia Oil & Gas Corporation (NYSE:MGY) is an independent oil and natural gas company. The one-month return of Magnolia Oil & Gas Corporation (NYSE:MGY) was 10.80%, and its shares lost 5.88% of their value over the last 52 weeks. On June 20, 2025, Magnolia Oil & Gas Corporation (NYSE:MGY) stock closed at $24.01 per share, with a market capitalization of $4.621 billion.
TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding Magnolia Oil & Gas Corporation (NYSE:MGY) in its Q1 2025 investor letter:
“We often see the ebb and flow of the Energy sector tied to underlying commodity prices. In this area, we seek low-cost exploration & production companies with high-yielding acreage or specialized service providers. Magnolia Oil & Gas Corporation (NYSE:MGY) is an exploration and development company with operations in Texas. Its share price surged 9% after they reported solid fourth quarter results which included profits above the consensus on slightly better production, pricing, and operating expense management.”
Aerial view of an oil and natural gas drilling operation on a leasehold position.
Magnolia Oil & Gas Corporation (NYSE:MGY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held Magnolia Oil & Gas Corporation (NYSE:MGY) at the end of the first quarter, which was 30 in the previous quarter. While we acknowledge the potential of Magnolia Oil & Gas Corporation (NYSE:MGY) 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 Magnolia Oil & Gas Corporation (NYSE:MGY) and shared most undervalued stocks with smart money ratings. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of MGY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
