SCCMS Enhanced Equity Income Fund Sold Baxter Int'l (BAX) Due to Near-Term Headwinds

Cullen Capital Management, LLC, operating under the name Schafer Cullen Capital Management, Inc. (SCCM), has released its “SCCM Enhanced Equity Income Fund” third-quarter investor letter. A copy of the letter can be downloaded here. US equities continued to rise in the third quarter, with the S&P 500 returning 8.1% while the Russell 1000 Value was up 5.3%. The composite returned 0.9% (net) in the quarter, compared to a 3.5% return for the S&P 500 Buy-Write Index (BXM) and a 2.5% return for the SPDR Bloomberg High Yield Bond ETF (JNK). In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, SCCM Enhanced Equity Income Fund highlighted stocks such as Baxter International Inc. (NYSE:BAX). Baxter International Inc. (NYSE:BAX) is a healthcare company that offers a portfolio of healthcare products. The one-month return for Baxter International Inc. (NYSE:BAX) was 2.67%, and its shares gained 41.89% over the last 52 weeks. On December 04, 2025, Baxter International Inc. (NYSE:BAX) stock closed at $18.48 per share, with a market capitalization of $9.5 billion.

SCCM Enhanced Equity Income Fund stated the following regarding Baxter International Inc. (NYSE:BAX) in its third quarter 2025 investor letter:

"Our position in Baxter International Inc. (NYSE:BAX) was sold in the quarter. While Baxter has historically provided strong returns to shareholders, its shares have significantly lagged since the onset of the Covid pandemic in 2020. Although management had a plan to recover from Covid era challenges and improve its profitability, including the sale of its underperforming Kidney Care business to private equity, margin pressure continued in 2024. Management cut the dividend by 40% in early 2025 to improve its financial strength and announced a CEO change in July. However, Baxter faced ongoing pricing pressure from hospital Group Purchasing Organizations (GPOs) in 2025, and faced operational challenges including safety incidents with its Novum IQ large volume pump that forced management to cut the full year earnings outlook. Although Baxter still has recovery potential in over the long-term, we decided to exit the position given the multiple near-term headwinds."

Baxter International Inc. (NYSE:BAX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 38 hedge fund portfolios held Baxter International Inc. (NYSE:BAX) at the end of the third quarter, up from 31 in the previous quarter. While we acknowledge the potential of Baxter International Inc. (NYSE:BAX) 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 Baxter International Inc. (NYSE:BAX) and shared the list of most undervalued stocks under $20 to buy. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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.