ClearBridge Small Cap Growth Strategy Took Profit and Exited Karman Holdings (KRMN) in Q1

ClearBridge Investments, an investment management company, released its “ClearBridge Small Cap Growth Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The stock market performance in the first quarter of 2025 was volatile, following the initial “animal spirits” post-election rally. The strategy surpassed its benchmark with the support of new ideas, reorienting efforts, and tailwinds in several industries despite volatility and uncertainty. Given the pace of major policy changes, the firm expects ongoing volatility as the effects of tariffs and policymaking have clouded visibility. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first quarter 2025 investor letter, ClearBridge Small Cap Growth Strategy emphasized stocks such as Karman Holdings Inc. (NYSE:KRMN). Karman Holdings Inc. (NYSE:KRMN) engages in designing, testing, manufacturing, and sale of mission-critical systems for missile and defense, space programs, hypersonic, and launch vehicle markets. The one-month return of Karman Holdings Inc. (NYSE:KRMN) was -9.77%. On April 7, 2025, Karman Holdings Inc. (NYSE:KRMN) stock closed at $26.77 per share with a market capitalization of $3.538 billion.

ClearBridge Small Cap Growth Strategy stated the following regarding Karman Holdings Inc. (NYSE:KRMN) in its Q1 2025 investor letter:

“We continued to generate a number of compelling new ideas, adding five new investments that we still held at quarter end: Glaukos, Rocket Lab USA, Karman Holdings (through its IPO), Archrock, Hims & Hers and Geron.

Karman Holdings Inc. (NYSE:KRMN) is a defense company providing key systems to customers in the areas of hypersonics, missile defense and space. Given its small initial allocation and its over 55% appreciation following the IPO, we took profits and exited the position.”

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Karman Holdings Inc. (NYSE:KRMN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. While we acknowledge the potential of Karman Holdings Inc. (NYSE:KRMN) 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 Karman Holdings Inc. (NYSE:KRMN) in another article, where we shared the list of best performing defense stocks so far in 2025. 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.