Should You Invest in Essential Properties Realty Trust (EPRT)?

Frontier Capital Management, an investment management company, released its “Frontier Small Cap Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Class N shares of the fund returned -14.43% in the first quarter, compared to -11.12% for the benchmark Russell 2000 Growth Index. The fund returned -14.50% for the 12 months ended March 31, 2025, compared to the benchmark return of -4.86%. US equities traded lower in the first quarter, mainly during the last week of the quarter. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first quarter 2025 investor letter, Frontier Small Cap Growth Fund highlighted stocks such as Essential Properties Realty Trust, Inc. (NYSE:EPRT). Essential Properties Realty Trust, Inc. (NYSE:EPRT) is a real estate investment trust that engages in the acquisition, ownership, and management of single-tenant properties. The one-month return of Essential Properties Realty Trust, Inc. (NYSE:EPRT) was -4.78%, and its shares gained 13.15% of their value over the last 52 weeks. On July 7, 2025, Essential Properties Realty Trust, Inc. (NYSE:EPRT) stock closed at $31.50 per share, with a market capitalization of $6.239 billion.

Frontier Small Cap Growth Fund stated the following regarding Essential Properties Realty Trust, Inc. (NYSE:EPRT) in its first quarter 2025 investor letter:

The market volatility has created several opportunities to invest in companies at prices we find attractive, and thus we have initiated new positions in a variety of industries. Examples include CACI International Inc Amentum Holdings, Inc., Essential Properties Realty Trust, Inc. (NYSE:EPRT), and DigitalOcean Holdings, Inc. Essential Properties owns and leases properties with a focus on regional and local mid-level markets. It is well capitalized and has a low percentage of leases rolling off over the next few years. Essential Properties is generating sector leading investment spreads, which should provide it with opportunities to grow faster than peers, boost its earnings, and potentially increase its multiple as well.

Essential Properties Realty Trust, Inc. (NYSE:EPRT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Essential Properties Realty Trust, Inc. (NYSE:EPRT) at the end of the first quarter, compared to 26 in the previous quarter. While we acknowledge the potential of Essential Properties Realty Trust, Inc. (NYSE:EPRT) 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 Essential Properties Realty Trust, Inc. (NYSE:EPRT) and shared The London Company Small Cap 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. While we acknowledge the potential of EPRT 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.

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Disclosure: None. This article is originally published at Insider Monkey.