Significant Margin Recovery Lifted Ingevity Corporation (NGVT) in Q3

The London Company, an investment management company, released “The London Company Small Cap Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. US equities continued their rally in the third quarter, driven by the Fed rate cut, solid corporate earnings, and enthusiasm around AI. The small-cap portfolio appreciated 1.9% (2.4% net) in the third quarter, compared to the Russell 2000 Index’s 12.4% gain. Please review the fund’s top 5 holdings to gain insight into their key selections for 2025.

In its third-quarter 2025 investor letter, The London Company Small Cap Strategy highlighted stocks such as Ingevity Corporation (NYSE:NGVT). Headquartered in North Charleston, South Carolina, Ingevity Corporation (NYSE:NGVT) engages in the manufacturing and distribution of activated carbon products, derivative specialty chemicals, and engineered polymers. The one-month return of Ingevity Corporation (NYSE:NGVT) was 0.71%, and its shares gained 24.11% of their value over the last 52 weeks. On November 3, 2025, Ingevity Corporation (NYSE:NGVT) stock closed at $53.84 per share, with a market capitalization of $1.963 billion.

The London Company Small Cap Strategy stated the following regarding Ingevity Corporation (NYSE:NGVT) in its third quarter 2025 investor letter:

"Ingevity Corporation (NYSE:NGVT) – NGVT outperformed its benchmark after showing a significant margin recovery in recent earnings, exceeding low expectations. It cleared major headwinds in its Performance Chemicals segment, fueling y/y gains. The strategic portfolio shifts are driving meaningful profit recovery for the next few years. While much of the business is experiencing a cyclical downturn, the overall mix of revenue is improving, as Performance Materials makes up a larger portion of the pie."

Ingevity Corporation (NYSE:NGVT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 25 hedge fund portfolios held Ingevity Corporation (NYSE:NGVT) at the end of the second quarter, up from 22 in the previous quarter. While we acknowledge the potential of Ingevity Corporation (NYSE:NGVT) 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 Ingevity Corporation (NYSE:NGVT) and shared The London Company Small Cap Strategy's views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

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