Mairs & Power, an investment advisory firm, recently shared its "Mairs & Power Balanced Fund" investor letter for the first quarter of 2025. The letter highlighted key market movements and the performance of the fund during a volatile period. February saw the stock market reach a historic peak, only for uncertainty surrounding tariffs in March to pull equities lower. Meanwhile, fixed-income assets gained favor as investors sought stability. By the end of the quarter, the fund posted a modest increase of 0.04%, outperforming the benchmark composite indexes—composed of 60% S&P 500 Total Return Index and 40% Bloomberg U.S. Government/Credit Bond Index, which fell by 1.48%—as well as the Morningstar Moderate Allocation peer group, which dropped by 0.34%.
Among the notable holdings in the fund was Motorola Solutions, Inc. (NYSE:MSI), a leading provider of public safety and enterprise security solutions. Despite a slight dip of -1.09% in one month, Motorola Solutions has shown impressive resilience with a 14.94% gain over the past year. As of May 6, 2025, the company’s stock closed at $412.64 per share, giving it a market capitalization of $68.88 billion.
In its letter, Mairs & Power offered insight into why Motorola Solutions remains a core part of their portfolio. The firm pointed out the company’s steady cash flow and the ongoing demand for its public safety equipment, which has made it a long-term favorite in their technology investments. "Our preference for companies with stable cash flows, like Motorola Solutions, has been a key factor in our outperformance within the sector," the letter stated, highlighting their heavy investments in Motorola Solutions and Texas Instruments (TXN) as significant contributors to their relative returns.
However, despite its success, Motorola Solutions does not appear among the top 30 most popular stocks among hedge funds. According to the firm’s database, 57 hedge funds held shares in Motorola Solutions by the end of the fourth quarter of 2024, up from 48 in the third quarter. While Mairs & Power acknowledges the strong potential of Motorola Solutions, they believe that AI stocks offer greater growth prospects. In fact, they have expressed confidence in AI as a promising avenue for higher returns in a shorter time frame, offering an intriguing alternative for investors seeking opportunities similar to the high-growth potential of companies like NVIDIA.
For those interested in AI-focused investments, Mairs & Power recommended exploring stocks trading at significantly lower earnings multiples, such as those covered in their detailed report on the most undervalued AI stocks.
To further expand on this topic, Mairs & Power has also shared an analysis of key AI news that investors should be paying attention to in their latest articles. For more insights from leading hedge funds and other influential investors, readers can visit their Q1 2025 hedge fund investor letters page.