Brown Capital Management, an investment management company, released its “The Brown Capital Management Small Company Fund” second quarter 2025 investor letter. A copy of the letter can be downloaded here. The small-cap US stocks rebounded in the second quarter following a challenging first quarter. The Small Company Fund returned 8.59% in the second quarter, lagging the Russell 2000® Growth index’s 11.97% return. The underperformance in the quarter occurred in the last few weeks of the period. In addition, check the fund’s top five holdings to know its best picks in 2025.
In its second-quarter 2025 investor letter, The Brown Capital Management Small Company Fund highlighted stocks such as Helios Technologies, Inc. (NYSE:HLIO). Headquartered in Sarasota, Florida, Helios Technologies, Inc. (NYSE:HLIO) is an industrial technology company that operates in the Hydraulics and Electronics segments. The one-month return of Helios Technologies, Inc. (NYSE:HLIO) was 5.46%, and its shares gained 29.41% of their value over the last 52 weeks. On September 12, 2025, Helios Technologies, Inc. (NYSE:HLIO) stock closed at $54.30 per share, with a market capitalization of $1.8 billion.
The Brown Capital Management Small Company Fund stated the following regarding Helios Technologies, Inc. (NYSE:HLIO) in its second quarter 2025 investor letter:
“There were no additions to the Small Company Fund in the second quarter of 2025, but there were three deletions—Helios Technologies, Inc. (NYSE:HLIO), Enfusion (ENFN) and Vicor (VICR).
Helios Technologies designs and manufactures solutions for the hydraulics and electronics markets. Helios’s hydraulics business provides screw-in hydraulic cartridge valves and manifolds which are used in diverse markets including material handling, construction equipment, agriculture, specialized vehicles and energy. The company’s electronics business provides electronic control, display and instrumentation solutions for recreational and off highway vehicles, health and wellness products, as well as power-generation equipment. We originally invested in Helios in 2009, based on its product differentiation and speed of innovation that helped drive market share gains in fast-growing markets. Several years ago, the company announced its Vision 2025 growth plan which would expand its electronics and hydraulics businesses through acquisition, and drive further growth into new markets with new products. However, the Vision plan’s increase of the company’s electronics exposure has had a negative impact on the company’s revenue durability and revenue growth. Also, the company has done an ineffective job of executing its growth plan as evidenced by its inability to enter new markets, further negatively impacting its growth profile. As a result of these changes in fundamentals, we eliminated Helios from the portfolio during the quarter.”
Helios Technologies, Inc. (NYSE:HLIO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 23 hedge fund portfolios held Helios Technologies, Inc. (NYSE:HLIO) at the end of the second quarter, compared to 15 in the previous quarter. While we acknowledge the risk and potential of Helios Technologies, Inc. (NYSE:HLIO) 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 Helios Technologies, Inc. (NYSE:HLIO) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Helios Technologies, Inc. (NYSE:HLIO) and shared the list of best industrial machinery 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.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
Disclosure: None. This article is originally published at Insider Monkey.
