Soumya Eswaran
3 min read
In This Article:
Hotchkis & Wiley, an investment management company, released its “Hotchkis & Wiley Mid-Cap Value Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The Hotchkis & Wiley Mid-Cap Value Fund returned -5.63% in the first quarter, underperforming the Russell Midcap Value Index’s -2.11% return. US mid-cap stocks surged post-Presidential elections due to potential benefits of deregulation, lower corporate taxes, and accelerated growth. However, Q1 2025 saw a decline due to tariffs, high inflation, and weak macroeconomic factors, causing the Russell Midcap Index to decline by -3.4% and the Russell Midcap Value Index by -2.1% vs. a decline of -7.1% for the Russell Midcap Growth 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, Hotchkis & Wiley Mid-Cap Value Fund highlighted stocks such as F5, Inc. (NASDAQ:FFIV). F5, Inc. (NASDAQ:FFIV) offers multi-cloud application security and delivery solutions. The one-month return of F5, Inc. (NASDAQ:FFIV) was 13.60%, and its shares gained 63.51% of their value over the last 52 weeks. On May 16, 2025, F5, Inc. (NASDAQ:FFIV) stock closed at $284.92 per share with a market capitalization of $16.363 billion.
Hotchkis & Wiley Mid-Cap Value Fund stated the following regarding F5, Inc. (NASDAQ:FFIV) in its Q1 2025 investor letter:
"F5, Inc. (NASDAQ:FFIV) sells application networking and security software, as well as data center appliances. F5 reported a strong quarter that benefited from an improving IT spending environment, the beginning of a hardware refresh cycle, and better than expected software renewals, expansions and net new customer acquisition. Management raised guidance for FY25 and described the new guide as “prudent” given the strong trends they are seeing on hardware refresh and software growth metrics. F5 has no debt, trades at an attractive valuation, and is benefiting from an improving gross margin and lower operating expenses."
A network engineer gazing intently at computer monitors, surrounded by servers and storage systems.
F5, Inc. (NASDAQ:FFIV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held F5, Inc. (NASDAQ:FFIV) at the end of the fourth quarter, compared to 31 in the third quarter. F5, Inc.’s (NASDAQ:FFIV) fiscal second quarter revenues reached $731 million, showcasing a 7% year-over-year improvement. While we acknowledge the potential of F5, Inc. (NASDAQ:FFIV) 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.
