Kenvue (KVUE) Slid Due to Operational Challenges

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Hedged Equity Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. US equity markets rebounded in the quarter, rising 23% from intra-period lows to close at record highs. The fund gained 4.86% (net) in the quarter compared to the S&P 500 Index’s 10.94% return and its secondary benchmark, the CBOE S&P 500 Buy/Write Index’s 1.90% return. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second-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 -5.23%, and its shares lost 3.51% of their value over the last 52 weeks. On August 25, 2025, Kenvue Inc. (NYSE:KVUE) stock closed at $21.19 per share, with a market capitalization of $40.665 billion.

Meridian Hedged Equity Fund stated the following regarding Kenvue Inc. (NYSE:KVUE) in its second 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 toward peer levels. The stock underperformed in the period due to operational challenges that may slow the turnaround timeline, a new 145% import tariff that negatively impacted margins, and softer-than-expected demand for some of its products. Despite near-term challenges, we continue to believe that the stock appears inexpensive on a sum-of-the-parts basis relative to the quality of its brand portfolio."

Kenvue Inc. (NYSE:KVUE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held Kenvue Inc. (NYSE:KVUE) at the end of the second quarter, which was 52 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.

In another article, we covered Kenvue Inc. (NYSE:KVUE) and shared the list of stocks with huge catalysts on the horizon. 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.