Fred Alger Management, an investment management company, released its “Alger Small Cap Focus Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Changing trade, monetary, and fiscal policies increased volatility in US stocks. The emergence of artificial intelligence (AI) models from China added to the uncertainty. Against this backdrop, the class A shares of the fund underperformed the Russell 2000 Growth Index. The Communication Services and Energy sectors contributed to the relative performance of the fund in the quarter, while the Health Care and Information Technology sectors detracted. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its first-quarter 2025 investor letter, Alger Small Cap Focus Fund highlighted stocks such as Agilysys, Inc. (NASDAQ:AGYS). Agilysys, Inc. (NASDAQ:AGYS) develops and markets software-enabled solutions and services to the hospitality industry. The one-month return of Agilysys, Inc. (NASDAQ:AGYS) was -7.51%, and its shares lost 15.05% of their value over the last 52 weeks. On April 17, 2025, Agilysys, Inc. (NASDAQ:AGYS) stock closed at $69.45 per share with a market capitalization of $1.942 billion.
Alger Small Cap Focus Fund stated the following regarding Agilysys, Inc. (NASDAQ:AGYS) in its Q1 2025 investor letter:
“Agilysys, Inc. (NASDAQ:AGYS) provides innovative software solutions for the hospitality industry, including point-of-sale (POS) systems, payment gateways, reservation and table management, guest offers management, property management, inventory and procurement, analytics, document management, and mobile and wireless services. During the quarter, shares detracted from performance after the company reported lower-than-expected fiscal third quarter revenues. The revenue shortfall was primarily due to weaker-than-expected POS software sales, particularly within the Managed Food Service segment, and softer international sales. As a result, management lowered their full-year revenue guidance, citing near-term challenges associated with transitioning their POS product to a new version.”
An expert IT engineer demonstrating a new software solution to hotel managers in a boardroom.
Agilysys, Inc. (NASDAQ:AGYS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Agilysys, Inc. (NASDAQ:AGYS) at the end of the fourth quarter which was 20 in the previous quarter. In the third quarter of fiscal 2025, Agilysys, Inc. (NASDAQ:AGYS) reported a record revenue of $69.6 million, reflecting an increase of 14.9% from prior year’s comparable quarter. While we acknowledge the potential of Agilysys, Inc. (NASDAQ:AGYS) 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.
