Varex Imaging (VREX) Bounced Back from Liberation Day Sell-Off

Rewey Asset Management, an investment management company, released its “RAM Smid Composite” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The third quarter was favorable for small-cap stocks. The composite increased 10.70% in the quarter, outperforming the 8.17% gain for the benchmark Russell 2500 Value Total Return Index. Year-to-date, the composite returned 9.29% vs. 9.29% for the benchmark. Market capitalization likely contributed to performance in the third quarter of 2025. Smaller market cap indices in the Russell family outperformed their larger counterparts. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, RAM Smid Composite highlighted stocks such as Varex Imaging Corporation (NASDAQ:VREX). Varex Imaging Corporation (NASDAQ:VREX) is an X-ray imaging components manufacturer. The one-month return of Varex Imaging Corporation (NASDAQ:VREX) was -3.27%, and its shares lost 1.06% of their value over the last 52 weeks. On October 13, 2025, Varex Imaging Corporation (NASDAQ:VREX) stock closed at $11.25 per share, with a market capitalization of $467.108 million.

RAM Smid Composite stated the following regarding Varex Imaging Corporation (NASDAQ:VREX) in its third quarter 2025 investor letter:

“Varex Imaging Corporation (NASDAQ:VREX) was our top 3Q25 performer, posting a return of 43.02%. Its share price recovered from its “Liberation Day” sell off as the investors recognized the tariff impact on VREX should not be as bad as feared. VREX’s China business predominantly serves only China, and the market there for VREX has improved. VREX also has significant flexibility to move production globally to offset the worst impacts of tariffs. We continue to think VREX is undervalued and neglected, as analysts have not recognized the healthcare CT market recovery and the growing strength of its security screening offerings.

Varex Imaging Corporation (NASDAQ:VREX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 22 hedge fund portfolios held Varex Imaging Corporation (NASDAQ:VREX) at the end of the second quarter, compared to 25 in the previous quarter. In the fiscal third quarter of 2025, Varex Imaging Corporation (NASDAQ:VREX) announced revenue of $203 million, exceeding guidance. While we acknowledge the risk and potential of Varex Imaging Corporation (NASDAQ:VREX) 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 Varex Imaging Corporation (NASDAQ:VREX) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In addition, please check out our hedge fund investor letters Q3 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.