Here's How Montrose Environmental Group (MEG) Rebounded in Q2

Baron Funds, an investment management company, released its “Baron Discovery Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund was up 14.76% (Institutional Shares), outperforming the 11.97% return for the Russell 2000 Growth Index. The fund was up 7.68% year-to-date, well ahead of the Index’s -0.48% return.  In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Baron Discovery Fund highlighted stocks such as Montrose Environmental Group, Inc. (NYSE:MEG). Montrose Environmental Group, Inc. (NYSE:MEG) is an environmental services company. The one-month return of Montrose Environmental Group, Inc. (NYSE:MEG) was -0.04%, and its shares lost 29.79% of their value over the last 52 weeks.  On July 29, 2025, Montrose Environmental Group, Inc. (NYSE:MEG) stock closed at $22.38 per share, with a market capitalization of $766.1 million.

Baron Discovery Fund stated the following regarding Montrose Environmental Group, Inc. (NYSE:MEG) in its second quarter 2025 investor letter:

"Shares of Montrose Environmental Group, Inc. (NYSE:MEG), a leading environmental services company, rebounded during the quarter. The stock had fallen sharply earlier in the year due to concerns that environmental policy changes and new leadership at the Environmental Protection Agency under President Trump would reduce enforcement of regulations underpinning Montrose’s testing and monitoring services. These concerns ultimately did not materialize, and the company continues to grow, supported by strong secular tailwinds such as rising industrial activity and increased regulatory oversight at the state level. Montrose’s decision to pause acquisition spending has also allowed its organic growth profile to stand out, while the payoff of its convertible debt has increased transparency, helping unlock value for shareholders. We remain invested in Montrose, as we believe the company retains its competitive advantages, stands to benefit from secular growth trends, and trades at an attractive valuation."

Montrose Environmental Group, Inc. (NYSE:MEG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 14 hedge fund portfolios held Montrose Environmental Group, Inc. (NYSE:MEG) at the end of the first quarter, compared to 17 in the previous quarter. Montrose Environmental Group, Inc.’s (NYSE:MEG) first quarter revenue increased 14.5% to $177.8 million. While we acknowledge the potential of Montrose Environmental Group, Inc. (NYSE:MEG) 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.

In another article, we covered Montrose Environmental Group, Inc. (NYSE:MEG) and shared Conestoga Capital Advisors' views on the company. In addition, please check out our hedge fund investor letters Q2 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.