The London Company, an investment management company, released “The London Company SMID Cap Strategy” second quarter 2025 investor letter. A copy of the letter can be downloaded here. Following a downturn in Q1, U.S. stocks experienced a double-digit gain in Q2, amid volatility stemming from tariff news. A risk-on rally followed due to a temporary pause in tariff escalations, widespread optimism around enterprise AI, and a healthy earnings outlook. Against this backdrop, the portfolio fell 0.6% (-0.8% net) during the second quarter vs. an 8.6% increase in the Russell 2500 Index. Sector allocation contributed to the fund’s performance in the quarter, while stock selection detracted. Please review the fund's top 5 holdings to gain insight into their key selections for 2025.
In its second quarter 2025 investor letter, The London Company SMID Cap Strategy highlighted stocks such as Murphy USA Inc. (NYSE:MUSA). Murphy USA Inc. (NYSE:MUSA) operates retail stores that market retail motor fuel products and convenience merchandise. The one-month return of Murphy USA Inc. (NYSE:MUSA) was -0.92%, and its shares lost 16.74% of their value over the last 52 weeks. On July 28, 2025, Murphy USA Inc. (NYSE:MUSA) stock closed at $420.53 per share, with a market capitalization of $8.31 billion.
The London Company SMID Cap Strategy stated the following regarding Murphy USA Inc. (NYSE:MUSA) in its second quarter 2025 investor letter:
“Murphy USA Inc. (NYSE:MUSA) – MUSA was a bottom performer after reporting softer market share gains in Q1 due to lower retail fuel prices. With that said, the long-term components of our thesis remain intact: structurally higher industry fuel margins, everyday low price driving profitable market share gains, and value-creating capital allocation.”
An exterior view of an illuminated gas station at night, surrounded by cars.
Murphy USA Inc. (NYSE:MUSA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held Murphy USA Inc. (NYSE:MUSA) at the end of the first quarter, which was 33 in the previous quarter. While we acknowledge the potential of Murphy USA Inc. (NYSE:MUSA) 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 another article, we covered Murphy USA Inc. (NYSE:MUSA) and shared Qualivian Investment Partners' views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.
