What Makes Stryker Corp. (SYK) a High-Quality, Defensive Compounder?

Parnassus Investments, an investment management firm, released its “Parnassus Value Equity Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund focuses on owning a concentrated portfolio of U.S. large-cap stocks. For the third quarter of 2025, the fund reported a net return of 7.46% outperforming its benchmark, the Russell 1000 Value Index, which returned 5.33% for the same period. During the quarter, the portfolio reduced its weight in the IT sector to increase holdings in the Health Care sector. The fund’s top 5 holdings are also listed in the letter, showing the firm’s main investment positions heading into 2025.

In its third-quarter 2025 investor letter, Parnassus Value Equity Fund highlighted stocks such as Stryker Corporation (NYSE:SYK) in the Q3 2024 investor letter. Headquartered in Portage, Michigan, Stryker Corporation (NYSE:SYK) is a medical technology company. The one-month return for Stryker Corporation (NYSE:SYK) was -2.19%, and its shares lost 1.28% over the last 52 weeks. On December 17, 2025, Stryker Corporation (NYSE:SYK) stock closed at $352.58 per share, with a market capitalization of $134.835 billion.

Parnassus Value Equity Fund stated the following regarding Stryker Corporation (NYSE:SYK) in its third quarter 2025 investor letter:

"Stryker Corporation (NYSE:SYK) offers exposure to a high-quality, defensive compounder. While shares have underperformed recently, the company's durable growth runway is supported by a slate of new launches in its MedSurgbusiness segment and expanding adoption of its robotics surgery platform in orthopedic procedures. We also expect continued progress on profitability under current CEO Kevin Lobo, who has a strong track record of leading successful innovations."

Stryker Corporation (NYSE:SYK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held Stryker Corporation (NYSE:SYK) at the end of the third quarter, which was 59 in the previous quarter. While we acknowledge the potential of Stryker Corporation (NYSE:SYK) 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 Stryker Corporation (NYSE:SYK) and shared the list of best blue-chip dividend stocks to build a passive income portfolio. In addition, please check out our hedge fund investor letters Q3 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.