Meridian Funds, managed by ArrowMark Partners, released its Q3 2025 investor letter for the “Meridian Small Cap Growth Fund.” A copy of the letter can be downloaded here. Buoyed by continued gains in technology and falling bond yields, stocks hit record highs in the quarter. US small-cap stocks outperformed in the quarter, gaining 12.4%, while large-cap stocks returned 5.3%. Among small caps, value stocks slightly outperformed growth stocks, returning 12.6% and 12.2%, respectively, according to Russell indices. In this environment, the fund returned 4.20% (net) in the third quarter, compared to the 12.19% return for the Russell 2000 Growth index. Plus, check out the fund’s top five holdings to learn your best picks in 2025.
In its Q3 2025 investor letter, Meridian Small Cap Growth Fund highlighted stocks like Kirby Corporation (NYSE:KEX). Kirby Corporation (NYSE:KEX) is a US-based domestic tank barge operator. Kirby Corporation (NYSE:KEX)’s monthly performance was 6.77% and its stock lost 6.26% of its value in the last 52 weeks. On December 2, 2025, Kirby Corporation (NYSE:KEX) stock closed at $113.44 per share, with a market capitalization of $6.33 billion.
Meridian Small Cap Growth Fund stated the following regarding Kirby Corporation (NYSE:KEX) in its Q3 2025 investor letter:
“Kirby Corporation (NYSE:KEX) is the largest U.S. inland shipping provider, transporting bulk liquid products such as petrochemicals, black oil, refined products and agricultural chemicals. The company also supports engines, transmissions and related equipment through its distribution and after-sales service business. We were initially attracted to Kirby because of its long track record of profitability, consistent free cash flow, and a transportation network more than twice the size of its closest competitor. Results came under pressure during the period as barge utilization weakened due to the regional refining mix, affecting prices, a key driver of long-term earnings. “Despite near-term challenges and lower earnings revisions from the Street, we remain confident in Kirby’s favorable supply-demand dynamics and growth potential, and increased our position during the period.”
Kirby Corporation (NYSE:KEX) isn’t on our list of the 30 most popular stocks among hedge funds. According to our database, Kirby Corporation (NYSE:KEX) had 46 hedge fund portfolios at the end of the third quarter, up from 40 in the previous quarter. While we recognize the potential of Kirby Corporation (NYSE:KEX) as an investment, we believe certain AI stocks offer greater growth potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that’s also benefiting significantly from Trump-era tariffs and the offshoring trend, check out our free report on best short-term AI stock.