Carillon Tower Advisers, an investment management company, recently released its first-quarter 2025 investor letter for the Carillon Eagle Small Cap Growth Fund. The letter discussed the performance of small-cap stocks in Q1, noting that the Russell 2000 Growth Index experienced a significant drop of 11.12%, trailing the Russell 2000 Value Index, which was down 7.74%. Within the Russell 2000 Growth Index, the real estate sector outperformed all others with a 1.76% increase, while consumer staples also saw a modest rise of 0.67%.
One of the highlighted stocks in the investor letter was Aris Water Solutions, Inc. (NYSE:ARIS), an environmental infrastructure and solutions company. The one-month return for Aris Water Solutions was -11.08%, but the stock had gained an impressive 53.32% over the past 52 weeks. As of May 23, 2025, Aris Water Solutions closed at $23.35 per share, with a market capitalization of $1.381 billion.
Carillon Eagle Small Cap Growth Fund expressed optimism about Aris Water Solutions, citing the company’s focus on providing water infrastructure and solutions for the oil and gas industry in the Permian Basin. The fund believes that Aris Water Solutions is well-positioned to benefit from trends in the oil and gas industry, particularly in the Delaware sub-basin of the Permian Basin. The company’s strong quarterly results were attributed to factors such as increasing ratios of water to oil in well output and growing demand for recycled water in new well completion activities.
While Aris Water Solutions is not among the 30 most popular stocks held by hedge funds, 28 hedge fund portfolios included the stock at the end of the first quarter. The fund acknowledges the potential of Aris Water Solutions as an investment but emphasizes its conviction in the potential of AI stocks to deliver higher returns in a shorter timeframe. For investors seeking promising AI stocks, the fund recommends exploring opportunities like the undervalued AI stock poised for massive gains.
In conclusion, the Carillon Eagle Small Cap Growth Fund’s first-quarter 2025 investor letter highlighted the performance of small-cap stocks, with a focus on Aris Water Solutions as a promising investment opportunity in the environmental infrastructure sector. Investors are encouraged to consider the fund’s insights and recommendations for potential growth opportunities in the market.
