Here’s Why NewMarket Corporation (NEU) Surged in Q2

The London Company, an investment management company, released “The London Company SMID Cap Strategy” second quarter 2025 investor letter. A copy of the letter can be downloaded here. Following a downturn in Q1, U.S. stocks experienced a double-digit gain in Q2, amid volatility stemming from tariff news. A risk-on rally followed due to a temporary pause in tariff escalations, widespread optimism around enterprise AI, and a healthy earnings outlook. Against this backdrop, the portfolio fell 0.6% (-0.8% net) during the second quarter vs. an 8.6% increase in the Russell 2500 Index. Sector allocation contributed to the fund’s performance in the quarter, while stock selection detracted. Please review the fund’s top 5 holdings to gain insight into their key selections for 2025.

In its second quarter 2025 investor letter, The London Company SMID Cap Strategy highlighted stocks such as NewMarket Corporation (NYSE:NEU). NewMarket Corporation (NYSE:NEU) engages in the manufacture and sale of petroleum additives. The one-month return of NewMarket Corporation (NYSE:NEU) was -2.37%, and its shares gained 21.67% of their value over the last 52 weeks. On July 28, 2025, NewMarket Corporation (NNYSE:NEU) stock closed at $694.96 per share with a market capitalization of $6.557 billion.

The London Company SMID Cap Strategy stated the following regarding NewMarket Corporation (NYSE:NEU) in its second quarter 2025 investor letter:

“NewMarket Corporation (NYSE:NEU) – NEU outperformed this quarter, fueled by strong AMPAC revenue growth from better volume and product mix, despite weaker Petroleum Additives results. The planned capacity expansion for the AMPAC business signals robust demand for rocket additives in a stable, oligopolistic market. Management prioritizes debt reduction and shareholder returns through dividends and buybacks.”

A bird’s eye view of an industrial refinery, with petrochemical tanks and pipes in the background.

NewMarket Corporation (NYSE:NEU) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held NewMarket Corporation (NYSE:NEU) at the end of the first quarter, which was 18 in the previous quarter. NewMarket Corporation (NYSE:NEU) reported net income of $126 million in Q1 2025 compared to $108 million in Q1 2024. While we acknowledge the risk and potential of NewMarket Corporation (NYSE:NEU) 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 NewMarket Corporation (NYSE:NEU) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered NewMarket Corporation (NYSE:NEU) and shared the list of best cheap energy stocks to invest in. 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.