Meridian Funds, managed by ArrowMark Partners, released its “Meridian Hedged Equity Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the market is more focused on the tailwind of policy easing than the headwind of weakening fundamentals, resulting in substantial gains despite stagflation emerging as a key concern. In this environment, the fund returned 1.67% (net) during the quarter, compared to 8.13% returns of the S&P 500 Index and 3.53% returns of the secondary benchmark, the CBOE S&P 500 BuyWrite Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, Meridian Hedged Equity Fund highlighted stocks such as Kenvue Inc. (NYSE:KVUE). Headquartered in Summit, New Jersey, Kenvue Inc. (NYSE:KVUE) is a consumer health company. The one-month return of Kenvue Inc. (NYSE:KVUE) was -0.06%, and its shares lost 21.06% of their value over the last 52 weeks. On December 23, 2025, Kenvue Inc. (NYSE:KVUE) stock closed at $17.02 per share, with a market capitalization of $32.609 billion.
Meridian Hedged Equity Fund stated the following regarding Kenvue Inc. (NYSE:KVUE) in its third quarter 2025 investor letter:
“Kenvue Inc. (NYSE:KVUE) is a consumer health company with leading brands like Tylenol, Listerine, and Neutrogena. Spun off from Johnson & Johnson, we see significant opportunities for Kenvue to unlock value by reinvesting in historically underfunded brands, optimizing its cost structure, and improving margins to enhance cash flow. The company’s stock dropped sharply during the period after reports surfaced that a forthcoming U.S. Health and Human Services study would link acetaminophen (Tylenol’s active ingredient) to elevated autism risk during pregnancy. We view the market reaction as overdone for several reasons: no new scientific evidence has established a causal link, pregnant women account for less than 1% of Tylenol’s global sales (minimal revenue impact), and similar claims were largely dismissed in litigation in late 2023 (though appeals remain pending). We continue to hold the company in the Fund and will closely monitor Kenvue’s progress.”
Kenvue Inc. (NYSE:KVUE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 73 hedge fund portfolios held Kenvue Inc. (NYSE:KVUE) at the end of the third quarter, up from 72 in the previous quarter. While we acknowledge the potential of Kenvue Inc. (NYSE:KVUE) 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.
