Meridian Funds, managed by ArrowMark Partners, recently released its third-quarter 2025 investor letter for the “Meridian Small Cap Growth Fund.” The letter highlighted the strong performance of equities in the quarter, driven by continued gains in technology and falling bond yields, resulting in record highs. U.S. small caps outperformed large caps, with small value stocks slightly surpassing growth stocks.
The Meridian Small Cap Growth Fund returned 4.20% (net) in the third quarter, compared to the Russell 2000 Growth Index’s 12.19% return. The fund’s top five holdings were also noted in the letter, showcasing its best picks for 2025.
One of the highlighted stocks in the investor letter was Kirby Corporation (NYSE:KEX). Kirby Corporation is the largest inland marine transportation provider in the U.S., specializing in moving bulk liquid products such as petrochemicals, black oil, refined products, and agricultural chemicals. Despite facing challenges in barge utilization due to regional refining mix issues, Kirby Corporation continues to demonstrate a long track record of profitability and consistent free cash flow. The fund added to its position in Kirby Corporation during the period, showing confidence in its favorable supply-demand dynamics and growth potential.
Kirby Corporation (NYSE:KEX) closed at $113.44 per share on December 02, 2025, with a market capitalization of $6.33 billion. While Kirby Corporation is not listed among the 30 Most Popular Stocks Among Hedge Funds, 46 hedge fund portfolios held the stock at the end of the third quarter. The fund acknowledges the potential of Kirby Corporation as an investment but believes that certain AI stocks offer greater upside potential with less downside risk.
For investors seeking opportunities in the AI sector, particularly in undervalued stocks that stand to benefit from current economic trends, exploring the best short-term AI stock could be advantageous. The fund suggests looking into AI stocks that could benefit significantly from Trump-era tariffs and the onshoring trend for potential investment opportunities.
Overall, Meridian Funds’ focus on small cap growth opportunities, coupled with strategic investment decisions in companies like Kirby Corporation, reflects a commitment to delivering long-term value for investors. The fund’s performance in the third quarter and its outlook for future investments demonstrate a proactive approach to navigating evolving market conditions and identifying promising opportunities in the small cap growth space.
