Carillon Tower Advisers, an investment management company, released its “Carillon Eagle Small Cap Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Small-cap stocks experienced a significant drop in Q1, with the Russell 2000 Growth Index (down 11.12%) trailing the Russell 2000 Value Index (down 7.74%). In the Russell 2000 Growth Index, real estate, which increased by 1.76%, outperformed all sectors both absolutely and relatively. The only other sector delivering positive returns was consumer staples, which rose by 0.67%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Carillon Eagle Small Cap Growth Fund highlighted stocks such as AAON, Inc. (NASDAQ:AAON). AAON, Inc. (NASDAQ:AAON), with a market capitalization of $8.063 billion, engages in engineering, manufacturing, marketing, and selling air conditioning and heating equipment. The one-month return of AAON, Inc. (NASDAQ:AAON) was 11.61%, and its shares gained 26.63% of their value over the last 52 weeks. On May 23, 2025, AAON, Inc. (NASDAQ:AAON) stock closed at $99.10 per share.

Carillon Eagle Small Cap Growth Fund stated the following regarding AAON, Inc. (NASDAQ:AAON) in its Q1 2025 investor letter:

"AAON, Inc. (NASDAQ:AAON) provides heating, ventilation, and air-conditioning (HVAC) solutions for commercial and industrial indoor environments. Shares lagged after the company posted a disappointing quarterly update that discussed issues on both the top-line and margins that management has characterized as temporary in nature. Channel dynamics related to the national transition at the end of last year to new regulatorily required refrigerants pressured sales in the company’s core roof-top unit business, while hiccups related to production capacity expansions within its data center cooling business weighed on margins."

A technician surrounded by complex chillers and data center cooling solutions.

AAON, Inc. (NASDAQ:AAON) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held AAON, Inc. (NASDAQ:AAON) at the end of the first quarter, which was 29 in the previous quarter. AAON, Inc.'s (NASDAQ:AAON) net sales for the first quarter of 2025 increased 22.9% year-over-year to $322.1 million. While we acknowledge the potential of AAON, Inc. (NASDAQ:AAON) 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 AAON, Inc. (NASDAQ:AAON) and shared Conestoga Capital Advisors' views on the company. 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.