Wasatch Global Investors, an asset management company, released its “Wasatch Small Cap Growth Strategy” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. stocks fell in the quarter as investors considered the potential economic effects of tariffs and government funding cuts. Softer economic data also impacted stocks. The Russell 2000® Growth index ended the quarter with a loss of -11.12%. Additionally, the Wasatch Small Cap Growth strategy declined and lagged the benchmark. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Wasatch Small Cap Growth Strategy highlighted stocks such as Freshpet, Inc. (NASDAQ:FRPT). Headquartered in Secaucus, New Jersey, Freshpet, Inc. (NASDAQ:FRPT) produces, markets, and distributes pet foods and treats. The one-month return of Freshpet, Inc. (NASDAQ:FRPT) was -10.24%, and its shares lost 25.30% of their value over the last 52 weeks. On April 17, 2025, Freshpet, Inc. (NASDAQ:FRPT) stock closed at $77.57 per share with a market capitalization of $3.779 billion.

Wasatch Small Cap Growth Strategy stated the following regarding Freshpet, Inc. (NASDAQ:FRPT) in its Q1 2025 investor letter:

"Another detractor was Freshpet, Inc. (NASDAQ:FRPT), a company that sells fresh, refrigerated meals and treats for dogs and cats. Revenue growth was a little lower than the market expected in Freshpet’s most recently reported quarter, but we believe the stock-price reaction was overdone. We spoke with management after the earnings call and have done our own analysis of Freshpet’s revenue streams. Based on our own analysis, we believe the company’s growth over the next several years will be far more durable than the market expects. Additionally, as the company scales, we believe gross margins will increasingly benefit from more resilient and predictable demand, leading to more efficient manufacturing."

A close up of a grocery store shelf with packages of the company's pet food products on it.

Freshpet, Inc. (NASDAQ:FRPT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held Freshpet, Inc. (NASDAQ:FRPT) at the end of the fourth quarter which was 38 in the previous quarter. While we acknowledge the potential of Freshpet, Inc. (NASDAQ:FRPT) 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.

In another article, we covered Freshpet, Inc. (NASDAQ:FRPT) and shared the list of best packaged food stocks to buy. In addition, please check out our hedge fund investor letters Q1 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.