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 Freshpet, Inc. (NASDAQ:FRPT). Headquartered in Bedminster, New Jersey, Freshpet, Inc. (NASDAQ:FRPT) produces, markets, and distributes pet foods and treats. The one-month return of Freshpet, Inc. (NASDAQ:FRPT) was -12.27%, and its shares lost 42.37% of their value over the last 52 weeks. On June 20, 2025, Freshpet, Inc. (NASDAQ:FRPT) stock closed at $74.13 per share, with a market capitalization of $3.616 billion.
TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding Freshpet, Inc. (NASDAQ:FRPT) in its Q1 2025 investor letter:
“Our preferences in the Consumer-oriented sectors lean toward value-oriented or specialty retailers, franchise models, or premium brands. Freshpet, Inc. (NASDAQ:FRPT), a producer and distributor of fresh refrigerated pet food, tumbled -43%. Mixed fourth quarter results included a miss to sales estimates and a beat to profits. We decided to reduce the position as there has been slower growth among lower- and middle-income households.”
A close up of a grocery store shelf with packages of the company’s pet food products on it.
Freshpet, Inc. (NASDAQ:FRPT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held Freshpet, Inc. (NASDAQ:FRPT) at the end of the first quarter, which was 40 in the previous quarter. Freshpet, Inc. (NASDAQ:FRPT) reported net sales of $263.2 million for the first quarter, marking an increase of about 18% compared to the previous year, largely due to volume growth. While we acknowledge the potential of Freshpet, Inc. (NASDAQ:FRPT) 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 Freshpet, Inc. (NASDAQ:FRPT) and shared the list of best future food stocks to buy according to analysts. 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 FRPT 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.
