Merion Road Capital Purchased American Woodmark (AMWD) Following Merger Announcement

AMWD +3.37%

Merion Road Capital Management, an investment advisor, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, Merion Road Small Cap Fund returned 5.0% compared to 12.4% return for the Russell 2000 Index. The long-only portfolio of Merion Road returned 10.1% during the quarter compared to the S&P 500’s 8.1% return. The portfolio’s performance was largely driven by the strong performance of Kratos. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Merion Road Capital Management highlighted stocks such as American Woodmark Corporation (NASDAQ:AMWD). American Woodmark Corporation (NASDAQ:AMWD) is a leading manufacturer and distributor of kitchen, bath, and home organization products. The one-month return of American Woodmark Corporation (NASDAQ:AMWD) was -25.78%, and its shares lost 50.80% of their value over the last 52 weeks. On November 20, 2025, American Woodmark Corporation (NASDAQ:AMWD) stock closed at $47.84 per share, with a market capitalization of $696.98 million.

Merion Road Capital Management stated the following regarding American Woodmark Corporation (NASDAQ:AMWD) in its third quarter 2025 investor letter:

"I bought shares in American Woodmark Corporation (NASDAQ:AMWD) following their announced merger with Masterbrand (“MBC”). AMWD & MBC are two of the largest US manufacturers of residential cabinets. What stood out to me were the identified synergies relative to their current earnings power. Specifically, the companies have identified $90mm in cost synergies relative to ~$490mm in EBITDA, an 18% increase. Importantly, MBC management is already 1 year into acquiring Supreme and have stated that the integration progress is on track relative to their initial estimates. Unlike Supreme, which has many high-end and customized products, AMWD has a more standardized product offering; as such any rejiggering of manufacturing locations with AMWD should be a lot easier.

American Woodmark Corporation (NASDAQ:AMWD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 22 hedge fund portfolios held American Woodmark Corporation (NASDAQ:AMWD) at the end of the second quarter, up from 19 in the previous quarter. While we acknowledge the potential of American Woodmark Corporation (NASDAQ:AMWD) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.