Broyhill cuts Avantor stake as destocking drags and Thermo Fisher gains ground

Broyhill Asset Management reported a 6.0% decline in its Equity Composite for the first quarter of 2026, underperforming the MSCI All Country World Index, which fell 3.1%. The firm attributed this underperformance to high exposure to non-cyclical industries, a lack of energy investments, and significant international holdings. A key portfolio detractor was Avantor (NYSE: AVTR), which saw its share price close at $7.62 on May 15, 2026, marking a 42.96% loss over 52 weeks.

Broyhill identified Avantor as a primary source of drag, citing a prolonged destocking cycle and the company’s failure to defend market share against competitor Thermo Fisher Scientific. In its investor letter, the firm noted that successive management teams had failed to protect their position against the larger rival. Consequently, Broyhill reduced its Avantor position, swapping shares for Thermo Fisher and redeploying capital into Sotera Health.

Avantor reported $1.58 billion in quarterly revenue, a 4% organic decline. The firm noted that 40 hedge funds held Avantor at the end of the fourth quarter, a decrease from 50 in the prior quarter. The company is no longer on Broyhill’s list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026.

The broader portfolio underperformance was also linked to global market volatility following strikes on Iran, which impacted the defensive strategy of holding non-cyclical sectors. Broyhill’s strategy, with nearly half the portfolio invested in non-cyclical industries, failed to provide the historical protection expected in the quarter.

While acknowledging Avantor’s potential, Broyhill stated that certain AI stocks offer greater upside potential with less downside risk. The firm highlighted Sotera Health as a more attractive opportunity, citing litigation fears that have created a chance to own a mission-critical sterilization duopoly at a meaningful discount to intrinsic value.