Here’s Why Madison Mid Cap Fund Sold Its Stake in Armstrong World Industries (AWI)

Madison Investments, an investment advisor, released its “Madison Mid Cap Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund (Class I) decreased 4.15% compared to the 3.40% decrease for the Russell Midcap Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Madison Mid Cap Fund highlighted stocks such as Armstrong World Industries, Inc. (NYSE:AWI). Headquartered in Lancaster, Pennsylvania, Armstrong World Industries, Inc. (NYSE:AWI) designs, manufactures, and sells ceiling and wall solutions. The one-month return of Armstrong World Industries, Inc. (NYSE:AWI) was -8.33%, and its shares gained 14.25% of their value over the last 52 weeks. On April 22, 2025, Armstrong World Industries, Inc. (NYSE:AWI) stock closed at $132.49 per share with a market capitalization of $5.76 billion.

Madison Mid Cap Fund stated the following regarding Armstrong World Industries, Inc. (NYSE:AWI) in its Q1 2025 investor letter:

“We sold one holding during the quarter, Armstrong World Industries, Inc. (NYSE:AWI). Armstrong is the leading manufacturer of ceiling products, including a dominant position in ceiling tiles. We purchased the stock in the throes of the Covid pandemic, when the stock became cheap given its exposure to the office real estate market. It derives the majority of its revenue from replacement and renovation demand, rather than new construction, and thus, the company has done well despite the continuation of a weak office building market. Both its profits and its share price have risen strongly since our investment, and the resulting increase in valuation is more reflective of its good prospects.”

A skilled craftsman installing a sophisticated mineral fiber ceiling.

Armstrong World Industries, Inc. (NYSE:AWI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held Armstrong World Industries, Inc. (NYSE:AWI) at the end of the fourth quarter compared to 27 in the third quarter. While we acknowledge the potential of Armstrong World Industries, Inc. (NYSE:AWI) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we covered Armstrong World Industries, Inc. (NYSE:AWI) and shared The London Company Mid Cap Strategy’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q1 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.