What Makes Patrick Industries (PATK) an Investment Choice?

Mairs & Power, an investment advisor, released the third-quarter 2025 investor letter for the “Mairs & Power Small Cap Fund.” A copy of the letter can be downloaded here. The market’s concentration persists in 2025, with a few dominant mega-cap stocks tied to artificial intelligence (AI) driving most of the favorable outcomes. The fund returned 2.06% in the first nine months of 2025. The fund underperformed the benchmark Russell 2000 Total Returns (TR) Index, which was up 10.39%, the S&P Small Cap 600 TR, which rose 4.24% and the Morningstar U.S. Fund Small Blend, which returned 6.15%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Mairs & Power Small Cap Fund highlighted stocks such as Patrick Industries, Inc. (NASDAQ:PATK). Patrick Industries, Inc. (NASDAQ:PATK) manufactures component products and materials for the recreational vehicle, marine, powersports, manufactured housing, and industrial markets. The one-month return for Patrick Industries, Inc. (NASDAQ:PATK) was 12.72%, and its shares gained 25.89% over the last 52 weeks. On December 10, 2025, Patrick Industries, Inc. (NASDAQ:PATK) stock closed at $114.13 per share, with a market capitalization of $3.798 billion.

Mairs & Power Small Cap Fund stated the following regarding Patrick Industries, Inc. (NASDAQ:PATK) in its third quarter 2025 investor letter:

"During the third quarter of 2025, the Fund initiated a position in Patrick Industries, Inc. (NASDAQ:PATK) and Trex Company, Inc. Patrick is a manufacturer and distributor of components and materials for RV, marine, manufactured housing, and residential construction markets that is benefiting from an ongoing outsourcing trend across these end markets. Tariff and inventory concerns caused a pullback in shares to a valuation we found attractive."

Patrick Industries, Inc. (NASDAQ:PATK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held Patrick Industries, Inc. (NASDAQ:PATK) at the end of the third quarter, which was 25 in the previous quarter. In Q3 2025, Patrick Industries, Inc.'s (NASDAQ:PATK) consolidated net sales increased 6% to $976 million. While we acknowledge the potential of Patrick Industries, Inc. (NASDAQ:PATK) 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 Patrick Industries, Inc. (NASDAQ:PATK) and shared the list of some of the most reliable dividend stocks. 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.