Worthington Steel (WS) Bounced Back after Reporting Strong Results

Springview Capital Management, an investment management company, released its second-quarter 2025 investor letter. A copy of the same can be downloaded here. Limited partners returned +17.8% in the second quarter, bringing the year-to-date return to +15.7% compared to the S&P 500’s +10.9% return in the quarter and +6.2% in the first half, including dividends. For more information on the fund’s top picks in 2025, please check its top five holdings.

In its second-quarter 2025 investor letter, Springview Capital Management highlighted stocks such as Worthington Steel, Inc. (NYSE:WS). Worthington Steel, Inc. (NYSE:WS) is a North America-based steel processor. The one-month return of Worthington Steel, Inc. (NYSE:WS) was -7.34%, and its shares lost 9.36% of their value over the last 52 weeks. On August 8, 2025, Worthington Steel, Inc. (NYSE:WS) stock closed at $29.94 per share, with a market capitalization of $1.523 billion.

Springview Capital Management stated the following regarding Worthington Steel, Inc. (NYSE:WS) in its second quarter 2025 investor letter:

"Worthington Steel, Inc. (NYSE:WS) also bounced back in Q2, following strong results for its fiscal fourth quarter (ended May). We’ve held our position for over a year, and while the investment has not met our expectations thus far, we continue to view it as a deeply cyclical opportunity with latent upside.

The company is exposed to domestic automotive and construction markets, both of which have weakened since our initial purchase. Tariff-related uncertainty hasn’t helped either—customers have grown cautious, curbing demand for Worthington’s custom steel products used in vehicles, transformers, garage doors, grain bins, and more.

Still, we believe Worthington’s challenges are mostly cyclical, not structural. The company has minimal net debt, attractive exposure to electrical steel (a growth area), and a meaningful opportunity to consolidate a fragmented industry. With a current market cap of $1.5 billion, we believe free cash flow could exceed $200 million annually within the next 1–2 years as end markets recover and recent investments in electrical steel capacity come on line."

Worthington Steel, Inc. (NYSE:WS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 13 hedge fund portfolios held Worthington Steel, Inc. (NYSE:WS) at the end of the first quarter, which was 11 in the previous quarter. While we acknowledge the potential of Worthington Steel, Inc. (NYSE:WS) 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 Worthington Steel, Inc. (NYSE:WS) and shared the list of successful spin-off companies and their 2025 returns. Worthington Steel, Inc. (NYSE:WS) detracted from Springview Capital Management's performance 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.