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Fred Alger Management, an investment management company, released its “Alger Spectra Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, changing trade, monetary, and fiscal policies created increased volatility in U.S. stocks. The introduction of advanced artificial intelligence (AI) models from China was a further source of uncertainty. Against this backdrop, the fund’s Class A shares underperformed the Russell 3000 Growth Index in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first quarter 2025 investor letter, Alger Spectra Fund emphasized stocks such as HEICO Corporation (NYSE:HEI). HEICO Corporation (NYSE:HEI) engages in the design and manufacturing of aerospace, defense, and electronic-related products and services. The one-month return of HEICO Corporation (NYSE:HEI) was -5.12%, and its shares gained 27.03% of their value over the last 52 weeks. On April 15, 2025, HEICO Corporation (NYSE:HEI) stock closed at $250.94 per share with a market capitalization of $30.663 billion.
Alger Spectra Fund stated the following regarding HEICO Corporation (NYSE:HEI) in its Q1 2025 investor letter:
"HEICO Corporation (NYSE:HEI) is a leading manufacturer of Federal Aviation Administration (FAA) approved jet engine and aircraft component replacement parts. Its Flight Support Group (FSG) provides FAA-approved aircraft and engine replacement parts, while the Electronics Technologies Group (ETG) serves industries such as aerospace, defense, homeland security, space, and medical with specialized electronic components. We believe the company is well-positioned to benefit from the steady aging of the global commercial aerospace fleet, resulting in increased consumption of aftermarket parts. Additionally, ongoing production issues from two major aircraft manufacturers have reduced the projected new plane deliveries, further supporting our view that the average age of the global fleet is likely to remain elevated over the next few years. During the quarter, shares contributed positively to performance after the company reported strong fiscal first-quarter results, driven by continued strength in the FSG segment as commercial flight hours remained robust. Furthermore, management highlighted a recovery within the ETG segment, supported by increased demand from the U.S. Department of Defense."
A fighter jet in formation, revealing the prowess of the companies defense arm.
HEICO Corporation (NYSE:HEI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held HEICO Corporation (NYSE:HEI) at the end of the fourth quarter which was 57 in the previous quarter. While we acknowledge the potential of HEICO Corporation (NYSE:HEI) 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.
