Andvari Associates, an investment management firm, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter the fund returned 7.2% net of fees compared to the SPDR S&P 500 ETF’s 4.3% decline. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2025.
In its first quarter 2025 investor letter, Andvari Associates emphasized stocks such as Danaher Corporation (NYSE:DHR). Danaher Corporation (NYSE:DHR) manufactures and distributes a diverse portfolio of products and services for professional, medical, industrial, and commercial applications. The one-month return Danaher Corporation (NYSE:DHR) was -12.60%, and its shares lost 26.77% of their value over the last 52 weeks. On April 9, 2025, Danaher Corporation (NYSE:DHR) stock closed at $191.89 per share with a market capitalization of $127.554 billion.
Andvari Associates stated the following regarding Danaher Corporation (NYSE:DHR) in its Q1 2025 investor letter:
“For the handful of companies in Andvari portfolios that do make physical goods, they all share a mitigating factor: they all have above average pricing power. The source of their pricing power stems from selling products that are critical to the end user and yet are a small proportion of the customers’ total costs. They also often benefit from high switching costs. Danaher Corporation (NYSE:DHR), Mettler-Toledo, Zoetis, and IDEXX fall into this camp, as well as TransDigm.
More specifically about Danaher, their customers design its equipment and consumables into pharma and biologic production lines. If a research lab has made the significant investment to standardize on Danaher equipment, it must continue to buy the appropriate consumables and receive regular maintenance services from Danaher. Thus, if a lab needs to grow, there is little chance a lab would stop buying from Danaher. If a pharmaceutical or biologic manufacturer needs to grow, there is virtually no chance they will switch to similar equipment unaffected by tariffs. It is just too costly and risky to be recertified by the FDA or its European equivalent, the EMA. Danaher can raise prices on its customers given the value provided by its products and the switching costs involved.”
A healthcare professional in a lab coat holding a microscope and looking at a slide under the lens.
Danaher Corporation (NYSE:DHR) is in 27th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 101 hedge fund portfolios held Danaher Corporation (NYSE:DHR) at the end of the fourth quarter which was 98 in the previous quarter. In 2024, Danaher Corporation (NYSE:DHR) reported an annual sale of $23.9 billion with a 1.5% decrease in core revenue. In the fourth quarter the company generated $6.5 billion in sales, showing a 1% core revenue growth. While we acknowledge the potential of Danaher Corporation (NYSE:DHR) 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 Danaher Corporation (NYSE:DHR) in another article, where we shared Artisan Global Opportunities Fund’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.