Overview
- Asset managers reporting in early May said AI rollouts and the late‑February conflict involving the U.S. and Iran drove Q1 volatility, with Energy leading sectors, up 38% as oil prices jumped and lifting U.S. producers such as Magnolia Oil & Gas.
- Defense and aerospace suppliers benefited from rising budgets and aircraft output, with Alger citing RBC Bearings’ tailwinds across commercial jets, aftermarket work, defense, industrial recovery, and space demand, and Diamond Hill pointing to Ducommun’s missile franchise gains.
- Diamond Hill described active positioning, adding Knowles after a shift toward higher‑margin medical, defense, and industrial components and initiating LSI Industries for its move to higher‑value lighting and display solutions under CEO Jim Clark.
- Baron highlighted Cognex’s rebound after a strong earnings report and cost cuts under a new management team, while Alger emphasized GeneDx’s proprietary genomic database as a moat despite near‑term competitive and pricing headwinds.
- Managers also flagged consumer and transport strain, noting Utz’s slide after below‑expected guidance tied to GLP‑1 use, reduced SNAP benefits, tougher competition, and higher freight costs, and Proficient Auto Logistics’ pressure from rising fuel and softer auto sales.