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