Should You Hold Addus HomeCare Corp. (ADUS)?

Wasatch Global Investors, an asset management company, released its “Wasatch Micro-Cap Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund was down -16.57% in the quarter, outperforming the benchmark Russell Microcap® Growth Index’s -17.75% return. U.S. equities fell in Q1, driven by tariffs, budget cuts, economic weakness, stagflation concerns, and AI-related companies, affecting micro-cap companies. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Wasatch Micro-Cap Fund highlighted stocks such as Addus HomeCare Corporation (NASDAQ:ADUS). Addus HomeCare Corporation (NASDAQ:ADUS) offers personal care services to the elderly, chronically ill, disabled persons, and individuals who are at risk of hospitalization. The one-month return of Addus HomeCare Corporation (NASDAQ:ADUS) was 10.60%, and its shares gained 4.23% of their value over the last 52 weeks. On May 27, 2025, Addus HomeCare Corporation (NASDAQ:ADUS) stock closed at $115.63 per share with a market capitalization of $2.127 billion.

Wasatch Micro-Cap Fund stated the following regarding Addus HomeCare Corporation (NASDAQ:ADUS) in its Q1 2025 investor letter:

"Addus HomeCare Corporation (NASDAQ:ADUS) was another notable detractor to performance during the quarter. We believe the headline news of potential Medicaid cuts by the Department of Government Efficiency (DOGE) pressured many health-care stocks, such as Addus. However, the company provides much needed personal-care services in the home and is more efficient than inpatient care. The company’s services also reduce readmittances. For these reasons, we think it can withstand potential Medicaid cuts and deliver strong growth."

Addus HomeCare Corporation (NASDAQ:ADUS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Addus HomeCare Corporation (NASDAQ:ADUS) at the end of the first quarter, which was 18 in the previous quarter. In Q1 2025, Addus HomeCare Corporation (NASDAQ:ADUS) reported revenue of $337.7 million, an increase of 20.3% compared to Q1 2024. While we acknowledge the potential of Addus HomeCare Corporation (NASDAQ:ADUS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Addus HomeCare Corporation (NASDAQ:ADUS) and shared TimesSquare Capital U.S. Small Cap Growth Strategy's views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q1 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.