Latest news with #HeadwatersCapitalManagement
Yahoo
15-07-2025
- Business
- Yahoo
Headwaters Capital Management Sold Transmedics (TMDX) After a Strong Q1 Report
Headwaters Capital Management, an investment management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The portfolio bounced back from the first quarter uncertainty and, like the rest of the market, experienced a strong rebound after the tariff-induced sell-off at the start of the quarter. The portfolio gained +7.5% (+7.3% net) in the quarter compared to a +8.5% gain for the Russell Mid Cap Index. In addition, you can check the fund's top 5 holdings to determine its best picks for 2025. In its second quarter 2025 investor letter, Headwaters Capital Management highlighted stocks such as TransMedics Group, Inc. (NASDAQ:TMDX). TransMedics Group, Inc. (NASDAQ:TMDX) is a medical technology company. The one-month return of TransMedics Group, Inc. (NASDAQ:TMDX) was -14.19%, and its shares lost 23.01% of their value over the last 52 weeks. On July 14, 2025, TransMedics Group, Inc. (NASDAQ:TMDX) stock closed at $116.88 per share, with a market capitalization of $3.954 billion. Headwaters Capital Management stated the following regarding TransMedics Group, Inc. (NASDAQ:TMDX) in its second quarter 2025 investor letter: "Top Contributor: TransMedics Group, Inc. (NASDAQ:TMDX) +98%. The top contributor for Q2 '25 was also the top detractor in Q4 '24. How quickly narratives can change despite actual results largely remaining the same. Concerns around TMDX approaching a market share ceiling were dismissed with Q1 '25 results. Market share gains for its OCS heart product resumed once a competitor's clinical trial reached completion, OCS liver continued to steadily gain share and seasonality in the transplant industry flipped from a headwind to a tailwind. Nonetheless, competitive dynamics are likely to change later in 2025 and into 2026, which led to the decision to sell TMDX following the strong share price performance (see details below). A surgeon in a modern operating theatre performing a transplant surgery with medical technology. TransMedics Group, Inc. (NASDAQ:TMDX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held TransMedics Group, Inc. (NASDAQ:TMDX) at the end of the first quarter, which was 29 in the previous quarter. TransMedics Group, Inc. (NASDAQ: TMDX) reported total revenue of $143.5 million for 1Q 2025, reflecting a year-over-year growth of about 48% and a sequential increase of around 18% from 4Q 2024. While we acknowledge the potential of TMDX 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. In another article, we covered TransMedics Group, Inc. (NASDAQ:TMDX) and shared best mid cap growth stocks to invest in. In addition, please check out our hedge fund investor letters Q2 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.
Yahoo
15-07-2025
- Business
- Yahoo
Here's Headwaters Capital Management's Investment Thesis for Bio-Techne (TECH)
Headwaters Capital Management, an investment management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The portfolio bounced back from the first quarter uncertainty and, like the rest of the market, experienced a strong rebound after the tariff-induced sell-off at the start of the quarter. The portfolio gained +7.5% (+7.3% net) in the quarter compared to a +8.5% gain for the Russell Mid Cap Index. In addition, you can check the fund's top 5 holdings to determine its best picks for 2025. In its second quarter 2025 investor letter, Headwaters Capital Management highlighted stocks such as Bio-Techne Corporation (NASDAQ:TECH). Bio-Techne Corporation (NASDAQ:TECH), with a market capitalization of $8.249 billion, develops, manufactures, and sells life science reagents, instruments, and services for the research and clinical diagnostic markets. The one-month return of Bio-Techne Corporation (NASDAQ:TECH) was 6.30%, and its shares lost 34.08% of their value over the last 52 weeks. On July 14, 2025, Bio-Techne Corporation (NASDAQ:TECH) stock closed at $52.62 per share. Headwaters Capital Management stated the following regarding Bio-Techne Corporation (NASDAQ:TECH) in its second quarter 2025 investor letter: "Buy: Bio-Techne Corporation (NASDAQ:TECH): A new position was added early in July and will be detailed in the Q3 letter. Summary Thesis: 1) Market leading life sciences reagents and instrument company. Recurring consumable revenue, strong profit margins, healthy free cash flow and a net cash position. 2) Concern around US academic funding is weighing on shares of TECH, pressuring the stock to its lowest valuation since 2017. 3) Revenue growth rate inflecting higher in FY '27 (6/30 FYE) as Company laps one-time NIH budget reset and growth assets propel consolidated revenue. 4) Coveted asset as evidenced by recent M&A transactions, which supports a significantly higher valuation than implied by current share price. A cutting-edge laboratory with technicians in white coats studying a POC device. Bio-Techne Corporation (NASDAQ:TECH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Bio-Techne Corporation (NASDAQ:TECH) at the end of the first quarter, which was 24 in the previous quarter. In the fiscal second quarter of 2025, Bio-Techne Corporation (NASDAQ:TECH) generated $316.2 million in revenues, up 6% year-over-year on an organic basis and 4% on reported basis. While we acknowledge the potential of TECH 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. In another article, we covered Bio-Techne Corporation (NASDAQ:TECH) and shared the list of best S&P 500 stocks with huge upside potential. In addition, please check out our hedge fund investor letters Q2 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.
Yahoo
10-04-2025
- Business
- Yahoo
Transcat (TRNS) Fell on Disappointing Results
Headwaters Capital Management, an investment management company, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. Smaller businesses, which are thought to be more susceptible to economic downturns, faced a challenging combination of economic and policy uncertainties in the quarter. It was not unexpected that small-cap equities led the market lower given the economic conditions that prevailed in Q1. In this environment, the fund returned -9.0% (-9.2% net) in the quarter compared to a -3.4% return for the Russell Mid Cap Index. In addition, you can check the fund's top 5 holdings to determine its best picks for 2025. In its first quarter 2025 investor letter, Headwaters Capital Management emphasized stocks such as Transcat, Inc. (NASDAQ:TRNS). Transcat, Inc. (NASDAQ:TRNS) offers calibration and laboratory instrument services. The one-month return of Transcat, Inc. (NASDAQ:TRNS) was 7.68%, and its shares lost 30.33% of their value over the last 52 weeks. On April 9, 2025, Transcat, Inc. (NASDAQ:TRNS) stock closed at $76.54 per share with a market capitalization of $690.48 million. Headwaters Capital Management stated the following regarding Transcat, Inc. (NASDAQ:TRNS) in its Q1 2025 investor letter: "Top Detractor: Transcat, Inc. (NASDAQ:TRNS) – 30%. TRNS delivered a disappointing quarter as results from their 2021 Nexa acquisition materially missed expectations. As a reminder, TRNS provides inspection and calibration services for test and measurement instruments in the life sciences and industrial industries. These calibration and testing services are highly regulated by governing bodies (FDA, etc) and are required to be performed on a regular schedule. NEXA provides more project-based consulting services and this part of NEXA's business saw a material decline in performance. Management appears to have ring fenced the issue and more importantly, the core calibration business for TRNS continues to perform well. Given the critical nature of Transcat's services, the continued trend toward outsourcing these services and ample M&A opportunities, I continue to believe in the long-term thesis for TRNS." A technician inspecting a complex instrument, relics of advanced technology in the backdrop. Transcat, Inc. (NASDAQ:TRNS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 11 hedge fund portfolios held Transcat, Inc. (NASDAQ:TRNS) at the end of the fourth quarter which was 10 in the previous quarter. In the fiscal third quarter of 2025, Transcat, Inc.'s (NASDAQ:TRNS) consolidated revenue was up 2% to $66.8 million however, organic revenue fell 4% from prior year quarter. While we acknowledge the potential of Transcat, Inc. (NASDAQ:TRNS) 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 cheapest AI stock. We covered Transcat, Inc. (NASDAQ:TRNS) in another article, where we shared Conestoga Capital Advisors' views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
10-04-2025
- Business
- Yahoo
Headwaters Capital Management's Top Q1 Contributor: Brown and Brown (BRO)
Headwaters Capital Management, an investment management company, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. Smaller businesses, which are thought to be more susceptible to economic downturns, faced a challenging combination of economic and policy uncertainties in the quarter. It was not unexpected that small-cap equities led the market lower given the economic conditions that prevailed in Q1. In this environment, the fund returned -9.0% (-9.2% net) in the quarter compared to a -3.4% return for the Russell Mid Cap Index. In addition, you can check the fund's top 5 holdings to determine its best picks for 2025. In its first quarter 2025 investor letter, Headwaters Capital Management emphasized stocks such as Brown & Brown, Inc. (NYSE:BRO). Headquartered in Daytona Beach, Florida, Brown & Brown, Inc. (NYSE:BRO) provides insurance products and services. The one-month return of Brown & Brown, Inc. (NYSE:BRO) was -1.04%, and its shares gained 41.13% of their value over the last 52 weeks. On April 9, 2025, Brown & Brown, Inc. (NYSE:BRO) stock closed at $116.64 per share with a market capitalization of $33.432 billion. Headwaters Capital Management stated the following regarding Brown & Brown, Inc. (NYSE:BRO) in its Q1 2025 investor letter: "Top Contributor: Brown & Brown, Inc. (NYSE:BRO) +22%. BRO was a stand-out performer during the quarter and is a perfect example of the market rotation that occurred in Q1. Fundamental results remained strong, but were largely in line with expectations. However, the stock was a beneficiary of multiple expansion as investors viewed BRO's P&C brokerage business as a safe haven in a tumultuous market. BRO's multiple expanded from 18x EBITDA at the beginning of the quarter to 21x by the end of the quarter. While I continue to expect BRO to post strong results from a combination of pricing, volume and M&A, the stock is trading at a peak multiple on what is likely near peak P&C rates given the prolonged strong pricing environment over the last 4 years. Given the significant outperformance during the quarter and elevated valuation, I significantly reduced the position size as I saw better opportunities in other parts of the market. A close-up of a life insurance policy with a middle-and lower-income family in the background. Brown & Brown, Inc. (NYSE:BRO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Brown & Brown, Inc. (NYSE:BRO) at the end of the fourth quarter compared to 35 in the third quarter. In the fourth quarter of 2024, Brown & Brown, Inc. (NYSE:BRO) reported revenues of $1.2 billion, representing an increase of 15% in total and 14% organically over Q4 of 2023. While we acknowledge the potential of Brown & Brown, Inc. (NYSE:BRO) 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 cheapest AI stock. We covered Brown & Brown, Inc. (NYSE:BRO) in another article, where we shared the list of pro-life companies to invest in. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
