Steelcase (SCS) to Merge with HNI Corp (HNI)

Middle Coast Investing, an investment advisor firm, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The third quarter was favorable for Middle Coast Investing. Its collective portfolio outperformed the S&P 500 and is ahead of benchmarks year to date. In Q3 2025, the US Portfolios returned 9.6% compared to 7.8% for the S&P 500. It’s Core U.S. portfolios returned 10% while the Russell 2000 returned 12%, the S&P 600 returned 8.7% and the Nasdaq generated 11.2% for the same period. Also, its European Portfolios appreciated by 5.5%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Middle Coast Investing highlighted stocks such as Steelcase Inc. (NYSE:SCS). Steelcase Inc. (NYSE:SCS) is a portfolio of furniture and architectural products and services provider. The one-month return of Steelcase Inc. (NYSE:SCS) was 0.59%, and its shares gained 32.86% of their value over the last 52 weeks. On October 6, 2025, Steelcase Inc. (NYSE:SCS) stock closed at $16.98 per share, with a market capitalization of $1.948 billion.

Middle Coast Investing stated the following regarding Steelcase Inc. (NYSE:SCS) in its third quarter 2025 investor letter:

"The last buyout was the least expected. Steelcase Inc. (NYSE:SCS), a major position for us I discussed last quarter, agreed to merge with HNI Corp (HNI). HNI corp previously bought Kimball International in 2023; we sold our shares then and missed out on owning HNI. This time around, merger docs show Steelcase did not shop itself around, and it probably could have squeezed more from a full deal process. But the merger makes sense, and SCS shareholders will own 36% of the combined company. We don’t plan on selling any of our shares in the near future, though we’ll happily take the $7.2/share cash HNI is offering as part of the exchange."

Steelcase Inc. (NYSE:SCS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 20 hedge fund portfolios held Steelcase Inc. (NYSE:SCS) at the end of the second quarter, compared to 25 in the previous quarter.  While we acknowledge the potential of STEELCASE INC. (NYSE:SCS) 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.