Fred Alger Management, an investment management company, released its “Alger Spectra Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, changing trade, monetary, and fiscal policies created increased volatility in U.S. stocks. The introduction of advanced artificial intelligence (AI) models from China was a further source of uncertainty.  Against this backdrop, the fund’s Class A shares underperformed the Russell 3000 Growth Index in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Alger Spectra Fund emphasized stocks such as GFL Environmental Inc. (NYSE:GFL). GFL Environmental Inc. (NYSE:GFL) offers non-hazardous solid waste management and environmental services. The one-month return of GFL Environmental Inc. (NYSE:GFL) was 1.12%, and its shares gained 46.28% of their value over the last 52 weeks. On April 16, 2025, GFL Environmental Inc. (NYSE:GFL) stock closed at $48.55 per share with a market capitalization of $17.942 billion.

Alger Spectra Fund stated the following regarding GFL Environmental Inc. (NYSE:GFL) in its Q1 2025 investor letter:

"GFL Environmental Inc. (NYSE:GFL) is a waste and environmental services company undergoing a significant transformation of its balance sheet. Over recent years, the company pursued extensive mergers and acquisitions, resulting in substantial debt. GFL has since committed to reducing this leverage by the end of 2025 through divesting non-core assets and emphasizing strong free cash flow generation. We believe this deleveraging will attract increased investor attention as the company continues to strengthen its balance sheet and sharpen its focus on its core solid waste operations. During the quarter, shares contributed positively to performance after the company reported strong fiscal fourth-quarter operating results and successfully divested its environmental services segment to private equity buyers. This sale generated higher-than-expected proceeds, enabling management to reduce debt to levels comparable with industry peers. Additionally, at its analyst day, management outlined a clear strategy for sustained growth and margin expansion, supporting its industry-leading earnings trajectory. We believe GFL remains undervalued as a pure-play solid waste business with superior growth potential yet trading at a discount relative to peers."GFL Environmental (GFL)’s $6 Billion Stake Sale—Here’s Why Jim Cramer Thinks It’s a Smart Move

An excavator at a landfill site operating amidst a pile of solid waste.

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GFL Environmental Inc. (NYSE:GFL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held GFL Environmental Inc. (NYSE:GFL) at the end of the fourth quarter which was 32 in the previous quarter. While we acknowledge the potential of GFL Environmental Inc. (NYSE:GFL) 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 cheapest AI stock.

We covered GFL Environmental Inc. (NYSE:GFL) in another article, where we shared the list of best waste management stocks to invest in. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

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

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