Diamond Hill Small-Mid Cap Strategy is Evaluating Ashland (ASH) Stock Position and Acquisition Potential

Diamond Hill Capital, an investment management company, released its “Small-Mid Cap Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q2, the market surged uniformly for the rest of the quarter following a sharp decline in April due to President Trump’s “Liberation Day” tariffs announcement. The portfolio returned 5.60% (gross) and 5.37% (net) compared to an 8.59% return for the Russell 2500 Index. For more information on the fund’s top picks in 2025, please check its top five holdings.

In its second-quarter 2025 investor letter, Diamond Hill Small-Mid Cap Fund highlighted stocks such as Ashland Inc. (NYSE:ASH). Ashland Inc. (NYSE:ASH) offers additives and specialty ingredients that operates through Life Sciences, Personal Care, Specialty Additives, and Intermediates segments. The one-month return of Ashland Inc. (NYSE:ASH) was 1.04%, and its shares lost 38.08% of their value over the last 52 weeks. On August 11, 2025, Ashland Inc. (NYSE:ASH) stock closed at $51.59 per share, with a market capitalization of $2.358 billion.

Diamond Hill Small-Mid Cap Fund  stated the following regarding Ashland Inc. (NYSE:ASH) in its second quarter 2025 investor letter:

“Other bottom Q2 contributors included ICON, Post Holdings and Ashland Inc. (NYSE:ASH). Specialty chemical manufacturer Ashland faces the potential for a weaker European macroeconomic environment and Chinese construction industry — sentiment-related factors have weighed more on the share price than they have on fundamentals, which have deteriorated more modestly. For now, we are maintaining our position and believe the company could at some point become attractive to potential acquirers, given the discount at which it is currently trading.”

A scientist surrounded by a laboratory of chemicals and beakers, developing small molecular therapies.

Ashland Inc. (NYSE:ASH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Ashland Inc. (NYSE:ASH) at the end of the first quarter, which was 24 in the previous quarter. In the third quarter of fiscal 2025, Ashland Inc.’s (NYSE:ASH) sales declined 15% year-over-year to $463 million. While we acknowledge the risk and potential of Ashland Inc. (NYSE:ASH) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Ashland Inc. (NYSE:ASH) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Ashland Inc. (NYSE:ASH) and shared Diamond Hill Mid Cap Strategy’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 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.