Impressive Results Boosted Embraer S.A. (ERJ) Shares by 26% in Q1
TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the fund returned -9.41% (gross) and -9.64% (net), compared to a -11.12% return for the Russell 2000 Growth Index. There was a broad positive sentiment in the market at the beginning of 2025. Expectations for a pro-business and soft regulatory environment lifted global markets in January. However, delays and uncertainties surrounding U.S. policies led to a significant downturn in March. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, TimesSquare Capital U.S. Small Cap Growth Strategy highlighted stocks such as Embraer S.A. (NYSE:ERJ). Embraer S.A. (NYSE:ERJ) is an aircraft and systems manufacturer. The one-month return of Embraer S.A. (NYSE:ERJ) was 10.53%, and its shares gained 88.75% of their value over the last 52 weeks. On June 20, 2025, Embraer S.A. (NYSE:ERJ) stock closed at $52.49 per share, with a market capitalization of $9.744 billion.
TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding Embraer S.A. (NYSE:ERJ) in its Q1 2025 investor letter:
“Many of our Industrial positions provide necessary business-to-business operational services, highly technical components, equipment enabling automation & efficiency improvements, or essential infrastructure services. Embraer S.A. (NYSE:ERJ) designs and manufactures aircraft and parts for commercial, defense, and executive aviation sectors. Its shares surged 26% on the heels of an impressive fourth quarter highlighted by a beat to earnings, better commercial revenues, and impressive defense & security margins. The company delivered 31 commercial aircraft and 44 executive jets during the quarter. We trimmed the position on this strength.”
An engineer examining a detailed blueprint of an aircraft.
Embraer S.A. (NYSE:ERJ) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held Embraer S.A. (NYSE:ERJ) at the end of the first quarter, which was 27 in the previous quarter. In the first quarter, Embraer S.A. (NYSE:ERJ)’s top line reached $1.1 billion. While we acknowledge the potential of Embraer S.A. (NYSE:ERJ) 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 undervalued AI stock set for massive gains.
In another article, we covered Embraer S.A. (NYSE:ERJ) and shared the list of stocks that should double in three years. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of HCC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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