Here’s Cedar Grove Capital Management’s Takeaway from Its Short Position Hims and Hers Health (HIMS)

Cedar Grove Capital Management, an investment management company, released its first quarter 2025 investor letter. A copy of the letter can be downloaded here. The strategy returned 0.38% in the first quarter compared to -4.27% for the S&P 500 and -9.51% for the Russell 2000. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first quarter 2025 investor letter, Cedar Grove Capital Management emphasized stocks such as Hims & Hers Health, Inc. (NYSE:HIMS). Hims & Hers Health, Inc. (NYSE:HIMS) offers a telehealth platform that connects consumers to licensed healthcare professionals. The one-month return of Hims & Hers Health, Inc. (NYSE:HIMS) was -6.50%, and its shares gained 101.99% of their value over the last 52 weeks.  On April 9, 2025, Hims & Hers Health, Inc. (NYSE:HIMS) stock closed at $29.49 per share with a market capitalization of $6.552 billion.

Cedar Grove Capital Management stated the following regarding Hims & Hers Health, Inc. (NYSE:HIMS) in its Q1 2025 investor letter:

“There are usually a few trades in an investor’s career that really stay with them, and it can be for a number of reasons, both good and bad. While still early in my career, I think one of them will forever be cemented as the short position we initiated with Hims & Hers Health, Inc. (NYSE:HIMS).

I think, without a doubt, getting squeezed for nearly a month on the name has to be one of the hardest nancial and psychological trades I’ve ever been a part of. Not because I was wrong, I wasn’t, but rather because I had never anticipated a delay in the catalyst coming to fruition that would result in a short squeeze…” (Click here to read the full text)

Hims & Hers Health, Inc. (NYSE:HIMS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held Hims & Hers Health, Inc. (NYSE:HIMS) at the end of the fourth quarter compared to 31 in the third quarter. Hims & Hers Health, Inc.’s (NYSE:HIMS) revenue was $481 million for the fourth quarter representing an increase of 95% year-over-year. While we acknowledge the potential of Hims & Hers Health, Inc. (NYSE:HIMS) 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 Hims & Hers Health, Inc. (NYSE:HIMS) in another article, where we shared ClearBridge Small Cap Growth Strategy’s views on the company. 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.