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What Makes Amentum Holdings (AMTM) an Attractive Bet?

What Makes Amentum Holdings (AMTM) an Attractive Bet?

Yahoo08-07-2025
Frontier Capital Management, an investment management company, released its 'Frontier Small Cap Growth Fund' first quarter 2025 investor letter. A copy of the letter can be downloaded here. Class N shares of the fund returned -14.43% in the first quarter, compared to -11.12% for the benchmark Russell 2000 Growth Index. The fund returned -14.50% for the 12 months ended March 31, 2025, compared to the benchmark return of -4.86%. US equities traded lower in the first quarter, mainly during the last week of the quarter. In addition, you can check the fund's top 5 holdings to determine its best picks for 2025.
In its first quarter 2025 investor letter, Frontier Small Cap Growth Fund highlighted stocks such as Amentum Holdings, Inc. (NYSE:AMTM). Amentum Holdings, Inc. (NYSE:AMTM) offers engineering and technology solutions to the U.S. and allied government agencies. The one-month return of Amentum Holdings, Inc. (NYSE:AMTM) was 8.47%, and YTD its shares gained 15.07% of their value. On July 7, 2025, Amentum Holdings, Inc. (NYSE:AMTM) stock closed at $24.20 per share, with a market capitalization of $5.888 billion.
Frontier Small Cap Growth Fund stated the following regarding Amentum Holdings, Inc. (NYSE:AMTM) in its first quarter 2025 investor letter:
"The market volatility has created several opportunities to invest in companies at prices we find attractive, and thus we have initiated new positions in a variety of industries. Examples include CACI International Inc, Amentum Holdings, Inc. (NYSE:AMTM), Essential Properties Realty Trust, Inc., and DigitalOcean Holdings, Inc. CACI and Amentum both provide essential services to the Department of Defense and other governmental agencies. These companies recently saw a dramatic decline in their stock prices as investors became concerned that the newly formed Department of Government Efficiency (DOGE) would recommend cuts across all government areas. While pruning inefficient spending is likely, we believe that the mission critical nature of the projects on which CACI and Amentum work, together with the considerable cost the government would incur to bring this work in-house, are testaments to the value these companies provide. While some projects may be delayed, increased spending on defense and digital infrastructure should enable these companies to grow earnings during the next few years."
A diverse team of professionals working together to deliver sophisticated engineering solutions.
Amentum Holdings, Inc. (NYSE:AMTM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held Amentum Holdings, Inc. (NYSE:AMTM) at the end of the first quarter, compared to 29 in the previous quarter. While we acknowledge the potential of Amentum Holdings, Inc. (NYSE:AMTM) 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 Amentum Holdings, Inc. (NYSE:AMTM) and shared the list of best new stocks to buy. 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 AMTM 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.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
Disclosure: None. This article is originally published at Insider Monkey.
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The Motley Fool recommends Medtronic and recommends the following options: long January 2026 $75 calls on Medtronic and short January 2026 $85 calls on Medtronic. The Motley Fool has a disclosure policy. The Next Generation of Dividend Kings: 3 Stocks to Watch was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

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