Should You Consider Adding Archrock (AROC) to Your Portfolio?

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 Archrock, Inc. (NYSE:AROC). Headquartered in Houston, Texas, Archrock, Inc. (NYSE:AROC) is an energy infrastructure company. The one-month return of Archrock, Inc. (NYSE:AROC) was -10.39%, and its shares gained 5.12% of their value over the last 52 weeks. On April 7, 2025, Archrock, Inc. (NYSE:AROC) stock closed at $21.56 per share with a market capitalization of $3.784 billion.

ClearBridge Small Cap Growth Strategy stated the following regarding Archrock, Inc. (NYSE:AROC) 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, Inc. (NYSE:AROC), Hims & Hers and Geron.

Archrock is a production-driven compression service provider supporting natural gas production. There are multiple catalysts driving a secularly positive trajectory for natural gas demand and Archrock operates in a consolidated, capacity-constrained market providing critical services supporting production.”

Archrock, Inc. (NYSE:AROC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Archrock, Inc. (NYSE:AROC) at the end of the fourth quarter compared to 23 in the third quarter. While we acknowledge the potential of Archrock, Inc. (NYSE:AROC) 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 Archrock, Inc. (NYSE:AROC) in another article, where we shared the list of stocks that outperform the broader market. 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.