What Makes Hawkins (HWKN) an Investment Bet?

Giverny Capital Asset Management, LLC, an investment management company, recently published its fourth-quarter 2025 investor letter. A copy of the same can be downloaded here. The Portfolio returned 0.01% compared to 2.66% for the S&P 500. YTD, the fund returned 12.58% compared to 17.88% for the Index. The firm faced a challenging fourth quarter and calendar year, despite solid appreciation. The outperformance of a few large technology companies has negatively impacted performance, given the portfolio’s underweight in large tech and overweight in smaller niche leaders. While portfolio companies are excelling in earnings growth and capital returns, the market is fixated on AI investments, leaving the actual benefits unclear. Additionally, you can review the Portfolio’s top 5 holdings to see its best picks for 2025.

In its fourth-quarter 2025 investor letter, Giverny Capital Asset Management highlighted Hawkins, Inc. (NASDAQ:HWKN) as one of its new holdings.  Hawkins, Inc. (NASDAQ:HWKN) is a specialty ingredients manufacturer used in water treatment, food and health applications, and industrial utilization. On January 30, 2026, Hawkins, Inc. (NASDAQ:HWKN) stock closed at $130.25 per share. One-month return of Hawkins, Inc. (NASDAQ:HWKN) was 13.20%, and its shares gained 15.77% of their value over the last twelve months. Hawkins, Inc. (NASDAQ:HWKN) has a market capitalization of about $2.722 billion.

Giverny Capital Asset Management stated the following regarding Hawkins, Inc. (NASDAQ:HWKN) in its fourth quarter 2025 investor letter:

“Our other purchase was Hawkins Inc. We’ve been watching Hawkins, Inc. (NASDAQ:HWKN) for some time and visited management in the summer of 2024. For a while, it looked like we’d missed our best chance to buy shares at reasonable prices as they’ve climbed steadily. A brief price correction in the fall gave us an opportunity and we acted.

One reason we were deliberate in our research is that for many years Hawkins was a good not-great business. It has three distinct business units, all of which involve chemistry. Of the three, the Water Treatment unit is the best. A few years ago, something clicked and management began to allocate capital into this segment aggressively.

Water Treatment serves small municipalities, farms and industrial businesses that cannot afford an in-house water department. Customers are sticky once they work with Hawkins’ skilled technicians and as the technicians add more customers to their weekly routes, the returns are exponential – a classic route density model.…” (Click here to read the full text)

Hawkins, Inc. (NASDAQ:HWKN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 12 hedge fund portfolios held Hawkins, Inc. (NASDAQ:HWKN) at the end of the third quarter, compared to 17 in the previous quarter. While we acknowledge the risk and potential of Hawkins, Inc. (NASDAQ:HWKN) 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 Hawkins, Inc. (NASDAQ:HWKN) 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 Q4 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.