Do You Believe in the Long-Term Earnings Potential of Floor and Decor (FND)?

Madison Investments, an investment advisor, released its “Madison Mid Cap Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund (Class Y) returned 5.2% compared to the 8.5% increase for the Russell Midcap Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, the Madison Mid Cap Fund highlighted stocks such as Floor & Decor Holdings, Inc. (NYSE:FND). Floor & Decor Holdings, Inc. (NYSE:FND) is a multi-channel specialty retailer of hard surface flooring and related accessories. The one-month return of Floor & Decor Holdings, Inc. (NYSE:FND) was 0.48%, and its shares lost 30.37% of their value over the last 52 weeks. On September 18, 2025, Floor & Decor Holdings, Inc. (NYSE:FND) stock closed at $83.37 per share, with a market capitalization of $8.978 billion.

Madison Mid Cap Fund stated the following regarding Floor & Decor Holdings, Inc. (NYSE:FND) in its second quarter 2025 investor letter:

"We added to three stocks during the quarter, CDW, Arista Networks, and Floor & Decor Holdings, Inc. (NYSE:FND). We added to our holding in Floor and Decor, as the stock lagged on declining investor sentiment for housing-related stocks, even as our view of the company’s long-term earnings potential remains unchanged."

Floor & Decor Holdings, Inc. (NYSE:FND) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 46 hedge fund portfolios held Floor & Decor Holdings, Inc. (NYSE:FND) at the end of the second quarter, up from 44 in the previous quarter.  Floor & Decor Holdings, Inc.’s (NYSE:FND) sales for the second quarter grew 7.1% to $1.214 billion. While we acknowledge the potential of Floor & Decor Holdings, Inc. (NYSE:FND) 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 Floor & Decor Holdings, Inc. (NYSE:FND) and shared Kovitz Core Equity Strategy's views on the company. 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.