Waters Corporation (WAT) Slipped Following the Acquisition Announcement

Baron Funds, an investment management company, released its “Baron Health Care Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund rose 5.39% (Institutional Shares) in the quarter, compared to a 5.05% gain for the Russell 3000 Health Care Index (benchmark) and an 8.18% gain for the Russell 3000 Index (the Index). The Fund performed similarly to the Benchmark this quarter. Solid stock selection was primarily offset by negative effects from active sub-industry allocations and cash holdings during a rising market. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Baron Health Care Fund highlighted stocks such as Waters Corporation (NYSE:WAT). Headquartered in Milford, Massachusetts, Waters Corporation (NYSE:WAT) is a specialty measurement company that provides analytical workflow solutions that operate through the Waters and TA segments. The one-month return of Waters Corporation (NYSE:WAT) was 8.56%, and its shares lost 10.74% of their value over the last 52 weeks. On November 3, 2025, Waters Corporation (NYSE:WAT) stock closed at $345.59 per share, with a market capitalization of $20.571 billion.

Baron Health Care Fund stated the following regarding Waters Corporation (NYSE:WAT) in its third quarter 2025 investor letter:

“Apart from cash, disappointing stock selection in life sciences tools & services and pharmaceuticals also weighed heavily on performance. Performance in life sciences tools & services was hindered by Waters Corporation (NYSE:WAT), a leader in providing quality control instruments and consumables for biopharmaceutical drug manufacturing. Shares fell after Waters announced the acquisition of Becton, Dickinson’s biosciences and diagnostics assets, a move that we thought would dilute the company’s growth rate and margins. Management’s rationale for the transaction was that they believed they could turn around an underperforming business. In our view, this fundamentally changed our original investment thesis, and we exited our position in favor of other opportunities.”

Is Waters Corporation (WAT) the Best Scientific Instruments Stock to Buy Right Now?

Waters Corporation (NYSE:WAT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 37 hedge fund portfolios held Waters Corporation (NYSE:WAT) at the end of the second quarter, up from 33 in the previous quarter. While we acknowledge the risk and potential of Waters Corporation (NYSE:WAT) 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 Waters Corporation (NYSE:WAT) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Waters Corporation (NYSE:WAT) and shared the list of oversold fundamentally strong stocks to buy. Baron Health Care Fund initiated a position in Waters Corporation (NYSE:WAT) during Q1 2025. In addition, please check out our hedge fund investor letters Q3 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.