Investment management company Vulcan Value Partners recently released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The first quarter experienced the return of volatility. The companies’ management teams expressed a more cautious view following the recent election. Optimism has given way to uncertainty about tariffs and potential impacts on earnings, inflation, and economic growth. In the quarter, the Large Cap Composite returned -2.1% net of fees and expenses, the Small Cap Composite returned -4.5% net, the Focus Composite returned -5.8% net, the Focus Plus composite returned -6.0% and the All-Cap Composite returned -4.1% net. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its first quarter 2025 investor letter, Vulcan Value Partners emphasized stocks such as Medpace Holdings, Inc. (NASDAQ:MEDP). Medpace Holdings, Inc. (NASDAQ:MEDP) is a clinical research-based drug and medical device development services provider. The one-month return of Medpace Holdings, Inc. (NASDAQ:MEDP) was -5.47%, and its shares lost 20.72% of their value over the last 52 weeks. On April 14, 2025, Medpace Holdings, Inc. (NASDAQ:MEDP) stock closed at $305.28 per share with a market capitalization of $9.228 billion.

Vulcan Value Partners stated the following regarding Medpace Holdings, Inc. (NASDAQ:MEDP) in its Q1 2025 investor letter:

"We purchased three positions during the quarter: Medpace Holdings Inc., Stanley Black & Decker, and TPG Inc. Medpace Holdings, Inc. (NASDAQ:MEDP) is a global clinical contract research organization (CRO) providing outsourced drug development services. Medpace provides a full-service model attractive to small and midsized biotechnology firms that lack the infrastructure needed to navigate the drug development process. This customer base is typically less price sensitive and relies on Medpace to perform end-to-end contract services for drug development. Medpace produces robust free cash flow and has a strong balance sheet. After several years of double-digit earnings growth, we expect the company to have a relatively flat year in 2025. Over the long term, we expect the company to return to double-digit growth. In addition to being outstanding operators, Medpace’s management team has a history of intelligent capital allocation decisions. We are pleased to own this wonderful business."

A medical professional in a lab coat discussing with a colleague.

Medpace Holdings, Inc. (NASDAQ:MEDP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held Medpace Holdings, Inc. (NASDAQ:MEDP) at the end of the fourth quarter which was 41 in the previous quarter. Medpace Holdings, Inc.’s (NASDAQ:MEDP) fourth quarter revenue was $536.6 million, up 7.7% year-over-year and full year 2024 revenue was $2.11 billion, up 11.8% from 2023. While we acknowledge the potential of Medpace Holdings, Inc. (NASDAQ:MEDP) 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 Medpace Holdings, Inc. (NASDAQ:MEDP) in another article, where we shared LVS Advisory's views on the company. 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.