Do You Believe in the Growth Prospects of Armstrong World Industries (AWI)?

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 Armstrong World Industries, Inc. (NYSE:AWI). Headquartered in Lancaster, Pennsylvania, Armstrong World Industries, Inc. (NYSE:AWI) designs, manufactures, and sells ceiling and wall solutions. The one-month return of Armstrong World Industries, Inc. (NYSE:AWI) was 7.11%, and its shares gained 34.20% of their value over the last 52 weeks. On July 28, 2025, Armstrong World Industries, Inc. (NYSE:AWI) stock closed at $168.82 per share with a market capitalization of $7.331 billion.

The London Company SMID Cap Strategy stated the following regarding Armstrong World Industries, Inc. (NYSE:AWI) in its second quarter 2025 investor letter:

"Armstrong World Industries, Inc. (NYSE:AWI) – AWI shares outperformed in the quarter due to beating expectations, driven by increased volumes from recent acquisitions and an increase in pricing. We continue to like AWI for its consistent execution, strong financials, leading market share and persistent moats through its exclusivity agreements and warranties."

Armstrong World Industries, Inc. (NYSE:AWI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held Armstrong World Industries, Inc. (NYSE:AWI) at the end of the first quarter, which was 35 in the previous quarter. While we acknowledge the potential of Armstrong World Industries, Inc. (NYSE:AWI) 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 Armstrong World Industries, Inc. (NYSE:AWI) and shared Madison Mid Cap Fund's 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.

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