Soumya Eswaran
3 min read
In This Article:
The London Company, an investment management company, released “The London Company Small Cap Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equities experienced a correction in 1Q25 due to macro risks, weak economic growth, and inflation. The fund declined 6.9% (-7.1%, net) compared to a 9.5% decrease in the Russell 2000 Index. The positive impact of stock selection contributed to the strategy's relative performance in the quarter, partially offset by sector exposure. For more information on the fund’s top picks in 2025, please check its top five holdings.
In its first-quarter 2025 investor letter, The London Company Small Cap Strategy highlighted stocks such as Atkore Inc. (NYSE:ATKR). Atkore Inc. (NYSE:ATKR) manufactures and distributes electrical, mechanical, safety, and infrastructure products and solutions. The one-month return of Atkore Inc. (NYSE:ATKR) was 23.31%, and its shares lost 54.83% of their value over the last 52 weeks. On May 12, 2025, Atkore Inc. (NYSE:ATKR) stock closed at $70.25 per share with a market capitalization of $2.364 billion.
The London Company Small Cap Strategy stated the following regarding Atkore Inc. (NYSE:ATKR) in its Q1 2025 investor letter:
"Initiated: Atkore Inc. (NYSE:ATKR) - ATKR dominates the electrical conduit market with 35% market share, offering bundled products - conduits, PVC, HDPE pipes, and other electrical raceway products. ATKR benefits from oligopolistic industry dynamics with only 2 competitors possessing comparable scale, translating to scale advantages. It operates mainly in U.S. non-residential construction and is levered to trends like electrification and data center growth. The company has improved margins (5% to -11% normalized) and ROIC (>14%) through diversification and proactive pricing strategies. ATKR requires minimal capex and generates strong cash flow. Most of the cash generated is used for effective share repurchases, a small dividend, and acquisitions. ATKR has retired more than 45% of outstanding shares since 2017."
A technician on a ladder inspecting the electrical components of an industrial building.
Atkore Inc. (NYSE:ATKR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Atkore Inc. (NYSE:ATKR) at the end of the fourth quarter compared to 36 in the third quarter. Atkore Inc. (NYSE:ATKR) reported net sales of $702 million in Q2 2025. While we acknowledge the potential of Atkore Inc. (NYSE:ATKR) 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.
