Heartland Advisors, an investment management company, released its “Heartland Mid Cap Value Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. A growing number of businesses appear to be priced for a significant slowdown in the first quarter, if not a recession, due to the uncertainty surrounding federal policy. The fund returned 0.67% in the quarter compared to a 2.11% fall for the Russell Midcap® Value Index. As risk aversion returned and a focus on downside risk was rewarded, stock selection, which was difficult in a more speculative climate last year, rebounded in 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, Heartland Mid Cap Value Fund highlighted stocks such as Teledyne Technologies Incorporated (NYSE:TDY). Teledyne Technologies Incorporated (NYSE:TDY) offers enabling technologies for industrial growth markets. The one-month return of Teledyne Technologies Incorporated (NYSE:TDY) was -7.43%, and its shares gained 15.51% of their value over the last 52 weeks. On April 17, 2025, Teledyne Technologies Incorporated (NYSE:TDY) stock closed at $462.19 per share with a market capitalization of $21.648 billion.

Heartland Mid Cap Value Fund stated the following regarding Teledyne Technologies Incorporated (NYSE:TDY) in its Q1 2025 investor letter:

"Teledyne Technologies Incorporated (NYSE:TDY), our largest holding, is the epitome of quality value. TDY has a well-managed, balanced portfolio of sensing and decision-support technologies across commercial and industrial end markets, including multiple secular growth areas spanning advanced machine vision, precision instrumentation, space and unmanned vehicles. TDY’s economically-sensitive customer exposure is somewhat buffered by stable markets like pollution control, water, oceanography and climate monitoring. TDY’s core markets are characterized by high barriers to entry and include niche specialized products and services unlikely to be commoditized.

In a challenging quarter for large tech stocks, Teledyne shares hit an all-time high at the start of the year, after beating consensus earnings estimates and continuing to expand profit margins despite getting little help from its challenged short-cycle end markets (where TDY has some of its highest-margin products). This helped investors imagine what earnings power could be if short-cycle markets recover.

TDY continues to execute on secular growth opportunities while demonstrating that its commercial businesses are more economically resilient than many tech-industrial peers. Despite this strong execution and the stock’s recent performance, the shares still trade at the lower end of the relative valuation premium range TDY has carried over the past decade. As we witness a “reality check” spreading across a number of companies that were trading at what we consider undeserved valuations, we think TDY’s prospects for strong relative performance remain bright."

A technician in a lab coat calibrating advanced electronic components.

Teledyne Technologies Incorporated (NYSE:TDY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held Teledyne Technologies Incorporated (NYSE:TDY) at the end of the fourth quarter compared to 39 in the third quarter. While we acknowledge the potential of Teledyne Technologies Incorporated (NYSE:TDY) 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.

In another article, we covered Teledyne Technologies Incorporated (NYSE:TDY) and shared the list of stocks with buy ratings that hedge funds back immensely. 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.