Huntington Ingalls Industries (HII) Surged After the Announcement of the New Shipbuilding Office

Diamond Hill Capital, an investment management company, released its “Mid Cap Strategy” investor letter for the first quarter of 2025. A copy of the letter can be downloaded here. The first quarter of 2025 was mixed due to a flurry of activity from the new presidential administration. However, the strategy outperformed the Russell Midcap Index in Q1, returning -1.26% (net) vs -3.40% for the index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2025.

In its first-quarter 2025 investor letter, Diamond Hill Mid Cap Strategy highlighted stocks such as Huntington Ingalls Industries, Inc. (NYSE:HII). Huntington Ingalls Industries, Inc. (NYSE:HII) is a US-based company that designs, builds, overhauls, and repairs military ships. The one-month return of Huntington Ingalls Industries, Inc. (NYSE:HII) was -3.50%, and its shares lost 10.31% of their value over the last 52 weeks. On June 4, 2025, Huntington Ingalls Industries, Inc. (NYSE:HII) stock closed at $224.79 per share, with a market capitalization of $8.821 billion.

Diamond Hill Mid Cap Strategy stated the following regarding Huntington Ingalls Industries, Inc. (NYSE:HII) in its Q1 2025 investor letter:

“Shares of US Department of Defense and Navy supplier Huntington Ingalls Industries, Inc. (NYSE:HII) rose in Q1 following President Trump’s announced formation of a new office of shipbuilding. The president further made comments suggesting the government is working to help Huntington Ingalls address recent supply chain and labor issues, which we anticipate will be resolved over time. We maintain our conviction in Huntington Ingalls’ positioning relative to the Department of Defense’s need to prepare for a potential conflict in the Pacific — which would in turn ensure strong demand for the next 5 to 10 years. Further, we believe resolving the aforementioned supply chain and labor issues will allow Huntington Ingalls to improve its margins — a likelihood which we believe is not yet reflected in the share price.”

Was Jim Cramer Right About Huntington Ingalls Industries Inc. (HII)?

A towering military warship off the shore, its hull representing the companies commitment to the defense sector.

Huntington Ingalls Industries, Inc. (NYSE:HII) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held Huntington Ingalls Industries, Inc. (NYSE:HII) at the end of the first quarter, which was 27 in the previous quarter. While we acknowledge the potential of Huntington Ingalls Industries, Inc. (NYSE:HII) 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 undervalued AI stock set for massive gains.

In another article, we covered Huntington Ingalls Industries, Inc. (NYSE:HII) and shared River Road Small-Mid Cap Value Fund’s views on the company. Diamond Hill Select Strategy initiated a position in Huntington Ingalls Industries, Inc. (NYSE:HII) during Q4 2024. 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.