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Performance Overview of the Mairs & Power Small Cap Fund in Q1 2025
The Mairs & Power Small Cap Fund released its first-quarter 2025 investor letter, detailing the fund’s performance and strategic outlook. The fund experienced a decline of 11.04% during the quarter, which was worse than several key benchmarks. These included the Russell 2000 Total Return Index, which fell by 9.48%, the S&P Small Cap 600 Total Return Index, down 8.93%, and the Morningstar U.S. Fund Small Blend Index, which declined by 8.09%. The underperformance was attributed to poor stock selection, particularly in sectors such as Healthcare, Financials, Information Technology, and Real Estate.
Investors interested in understanding the fund’s strategy can review its top five holdings to gain insight into its best picks for 2025.
Key Stock Highlight: Cognex Corporation (NASDAQ: CGNX)
One of the notable stocks highlighted in the investor letter was Cognex Corporation (NASDAQ: CGNX). This company specializes in machine vision products that automate manufacturing and distribution tasks by capturing and analyzing visual information. Over the past month, the stock returned 6.00%, but it has lost 32.20% of its value over the last 52 weeks. As of June 27, 2025, Cognex’s stock closed at $31.46 per share, with a market capitalization of $5.281 billion.
In its Q1 2025 letter, Mairs & Power described Cognex as a leading provider of computer vision systems for industrial automation. Headquartered in Massachusetts, the company serves a broad range of industries, including automotive, semiconductor, logistics, healthcare, and consumer goods manufacturers. The firm emphasized that Cognex’s embedded AI capabilities are promising, as they enhance accuracy and productivity for customers’ material handling processes. Additionally, the company’s products reduce deployment complexity, giving it a competitive edge in the market.
Hedge Fund Holdings and Financial Performance
Despite its strong position in the market, Cognex Corporation is not on the list of the 30 Most Popular Stocks Among Hedge Funds. However, according to available data, 40 hedge fund portfolios held shares of Cognex at the end of the first quarter, compared to 37 in the previous quarter. In terms of financial performance, the company reported $216 million in revenue, exceeding the guidance midpoint and reflecting a 2% year-over-year growth.
While the fund acknowledges the potential of Cognex as an investment, it maintains a stronger conviction in AI stocks, which it believes offer greater returns in a shorter timeframe. For investors seeking an AI stock similar to NVIDIA but trading at less than five times its earnings, a detailed report on undervalued AI stocks is available.
Additional Insights and Resources
In a separate article, the focus was on Cognex Corporation and the list of overlooked dividend-paying stocks. Investors interested in more insights can explore the hedge fund investor letters page for Q1 2025, where additional reports from hedge funds and other leading investors are available.
While Cognex is considered a solid investment, the firm believes that certain AI stocks present better upside potential with lower downside risk. For those looking for an extremely undervalued AI stock that could benefit from Trump-era tariffs and the onshoring trend, a free report on the best short-term AI stock is also available.
Further Reading
For more information on stock performance and investment opportunities, readers can explore related articles such as:
- The Best and Worst Dow Stocks for the Next 12 Months
- 10 Unstoppable Stocks That Could Double Your Money
These resources provide valuable insights for investors seeking to make informed decisions in the current market environment.
