The London Company, an investment management firm, recently released its third-quarter 2025 investor letter discussing the performance of their Small Cap Strategy. The letter highlighted the impressive performance of US equities in the third quarter, driven by factors such as the Fed rate cut, strong corporate earnings, and enthusiasm surrounding AI. Despite the overall market rally, the small-cap portfolio managed to appreciate 1.9% (2.4% net) during the quarter, falling short of the Russell 2000 Index’s 12.4% gain.
One of the key stocks mentioned in the investor letter was Ingevity Corporation (NYSE:NGVT). Based in North Charleston, South Carolina, Ingevity Corporation is involved in the manufacturing and distribution of activated carbon products, derivative specialty chemicals, and engineered polymers. The stock had a one-month return of 0.71% and had gained 24.11% over the past 52 weeks. As of November 3, 2025, Ingevity Corporation’s stock closed at $53.84 per share, with a market capitalization of $1.963 billion.
The London Company Small Cap Strategy provided insights into their investment thesis for Ingevity Corporation in the third quarter. The investor letter noted that Ingevity Corporation had outperformed its benchmark, showing a significant margin recovery in recent earnings that exceeded low expectations. The company cleared major headwinds in its Performance Chemicals segment, leading to year-over-year gains. Strategic portfolio shifts were driving meaningful profit recovery for the next few years, despite the cyclical downturn in some parts of the business.
While Ingevity Corporation was not among the 30 most popular stocks among hedge funds, the London Company Small Cap Strategy believed in its potential as an investment. However, they also highlighted certain AI stocks that offered greater upside potential and lower downside risk. Investors looking for undervalued AI stocks that could benefit from Trump-era tariffs and the onshoring trend were encouraged to explore their free report on the best short-term AI stock.
For more information on Ingevity Corporation and insights from The London Company Small Cap Strategy, readers were directed to another article covering the company. Additionally, the hedge fund investor letters Q3 2025 page was recommended for more investor letters from hedge funds and other leading investors.
