What Makes Middleby Corporation (MIDD) a Good Investment?

Ariel Investments, an investment management company, released its “Ariel Small Cap Concentrated Value Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. US equities continued their rally in the third quarter, fueled by the Federal Reserve's initial rate cut of the year, strong corporate earnings growth, and increased market participation. In the quarter, Ariel Small Cap Concentrated Value Composite returned +15.08% gross of fees (+14.93% net of fees) compared to +12.60% and +12.39% returns of the Russell 2000 Value Index and the Russell 2000 Index, respectively. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Ariel Small Cap Concentrated Value Strategy highlighted stocks such as The Middleby Corporation (NASDAQ:MIDD). The Middleby Corporation (NASDAQ:MIDD) manufactures and services foodservice, food processing, and residential kitchen equipment. The one-month return of The Middleby Corporation (NASDAQ:MIDD) was -4.43%, and its shares lost 16.98% of their value over the last 52 weeks. On November 27, 2025, The Middleby Corporation (NASDAQ:MIDD) stock closed at $117.68 per share, with a market capitalization of $5.964 billion.

Ariel Small Cap Concentrated Value Strategy stated the following regarding The Middleby Corporation (NASDAQ:MIDD) in its third quarter 2025 investor letter:

"Also in the quarter, we initiated a position in The Middleby Corporation (NASDAQ:MIDD), which is a leading food equipment manufacturer. While the shares have been under pressure due to the challenging macro-backdrop and related concerns around new restaurant openings, we view these headwinds as transient. Longer term, MIDD’s differentiated brands and focus on innovation should enable the company to benefit from secular demand for more automation and efficiency in the food service industry."

The Middleby Corporation (NASDAQ:MIDD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held The Middleby Corporation (NASDAQ:MIDD) at the end of the third quarter, which was 36 in the previous quarter. In the third quarter of 2025, The Middleby Corporation (NASDAQ:MIDD) announced total revenue of $980 million, surpassing the upper limit of the guidance range. While we acknowledge the potential of The Middleby Corporation (NASDAQ:MIDD) 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 The Middleby Corporation (NASDAQ:MIDD) and shared a bullish thesis on the company. 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.