We recently published a list of the 15 Small-Cap Construction and Materials Stocks Hedge Funds Are Buying. In this article, we are going to take a look at where RPM International Inc. (NYSE:RPM) stands against other small-cap construction and materials stocks.
Saira Malik, Nuveen’s head of equities and fixed income, joined ‘Closing Bell’ on CNBC on March 26 to discuss her investment strategy in the middle of this uncertain market. She emphasized that two dominant themes are shaping the second quarter of this year: policy uncertainty and questions surrounding the pace of the economic slowdown. Malik noted that markets have shown a little optimism after a rebound from correction territory. This was driven by investor expectations of watered-down tariffs and the return of the term ‘transitory’ regarding inflation effects from tariffs. However, she highlighted that the economy continues to slow. Given this, Malik prefers defensive market sectors, particularly infrastructure. She also identified municipal bonds as a favored fixed-income category.
These appeal to local investors who seek stable income streams in the middle of this economic uncertainty. Malik also acknowledged the risk that continued negative sentiment about consumer weakness could become a self-fulfilling prophecy. She pointed out that the economy’s recent strength has been driven by consumer spending and employment, with about half of payroll growth since 2019 coming from government jobs. The recent data on consumer spending, retail sales, and confidence have been weak, but consumers often express pessimism without reducing spending proportionally. Despite this, she stressed that the economy is slowing and warned that ongoing tariff uncertainty could cause a sharper economic downturn. However, she also mentioned potential upside from forthcoming tax cuts and deregulation, which could provide economic support. Malik explained that the market’s recent optimism comes from increasing clarity about tariff implementation and targets.
Our Methodology
We first sifted through financial media reports, ETFs, and Insider Monkey’s Q4 2024 hedge funds database reports to compile a list of the small-cap construction and materials stocks hedge funds are buying. For this article, we define small-cap stocks as those that trade between $10 billion and $30 billion, as of April 28. We then selected the top 15 stocks and ranked them in ascending order of the number of hedge funds that have stakes in them. In cases where an equal number of hedge funds held two or more stocks, we used the market cap as a tiebreaker.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An aerial view of a large industrial roofing system installed by the specialty chemical company.
RPM International Inc. (NYSE:RPM)
Market Capitalization as of April 28: $13.45 billion
Number of Hedge Fund Holders: 30
RPM International Inc. (NYSE:RPM) manufactures and sells specialty chemicals for the industrial, specialty, and consumer markets worldwide. It has a focus on the construction and materials markets, which is why its offerings include services like roofing and building maintenance, sealing & bonding, flooring, and concrete repair, among others.
In FQ3 2025, the company’s PCG (Performance Coatings Group) sales declined slightly against a challenging prior year that saw a 9.2% organic sales increase to a record level. Growth in FQ3 was led by the fiberglass reinforced plastics businesses, which experienced sales in the data center construction market.
While the overall company expects flat consolidated sales in FQ4, PCG is projected to lead with modest earnings growth and margin expansion. This positive outlook for PCG is supported by the spending on high-performance buildings, growth in passive fire protection, and the acquisition of TMPC, which is a seasonal business that generates most of its sales and profits in the fourth and first quarters.
Overall, RPM ranks 12th on our list of the small-cap construction and materials stocks hedge funds are buying. While we acknowledge the growth potential of RPM, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than RPM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
