Renaissance Investment Management, an investment management company, released its Q1 2025 “Small Cap Growth Strategy” investor letter. A copy of the letter can be downloaded here. The S&P 500 has not seen a “correction” since 2023, yet such events are usual every two years. While the firm continues to identify solid investment opportunities, especially in high-quality, fairly priced stocks that have lagged major market indices for several years. As uncertainty around the impact of the economic policies of President Trump weighed on sentiment, the Russell 2000 Growth Index declined in the quarter. While the strategy also declined in the quarter but outperformed the index. For more information on the fund’s best picks in 2025, please check its top five holdings.
In its first-quarter 2025 investor letter, Renaissance Investment Management Small Cap Growth Strategy highlighted stocks such as UFP Technologies, Inc. (NASDAQ:UFPT). UFP Technologies, Inc. (NASDAQ:UFPT) manufactures solutions for medical devices, sterile packaging, and other highly engineered custom products. The one-month return of UFP Technologies, Inc. (NASDAQ:UFPT) was 4.82%, and its shares lost 5.34% of their value over the last 52 weeks. On June 18, 2025, UFP Technologies, Inc. (NASDAQ:UFPT) stock closed at $240.25 per share with a market capitalization of $1.852 billion.
Renaissance Investment Management Small Cap Growth Strategy stated the following regarding UFP Technologies, Inc. (NASDAQ:UFPT) in its Q1 2025 investor letter:
“UFP Technologies, Inc. (NASDAQ:UFPT), a new position added this quarter, is a contract manufacturer that also provides engineering and development services primarily serving the MedTech industry. In many ways UFPT acts as an extension of its customers’ R&D efforts. The company is often heavily embedded in the entire manufacturing process, starting with design and development, continuing with prototyping, then through to the commercial manufacturing of a product. The company is able to monetize these value-added services, and the MedTech end market al lows the company to achieve higher margins and products with long life cycles. We believe the company should continue to see steady revenue growth with improving margins that are driven by its high value-add capabilities.”
A doctor holding a specialized foam device, demonstrating the companies medical contributions.
UFP Technologies, Inc. (NASDAQ:UFPT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held UFP Technologies, Inc. (NASDAQ:UFPT) at the end of the first quarter, which was 21 in the previous quarter. UFP Technologies, Inc.’s (NASDAQ:UFPT) first quarter sales increased 41.1% to $148.1 million from $105 million last year. While we acknowledge the potential of UFP Technologies, Inc. (NASDAQ:UFPT) 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 UFP Technologies, Inc. (NASDAQ:UFPT) and shared the list of best performing stocks of the last 20 years according to Jim Cramer. 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 UFPT 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.
