Meridian Contrarian Fund Sold Radius Recycling (RDUS). Here’s Why

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equities saw their weakest quarterly performance since 2022, as uncertainty about potential tariff policies affected investor sentiment and risk assets. In this environment, the fund returned -7.59% (net) during the quarter, slightly behind the -7.50% returns of the Russell 2500 Index and underperforming the -5.83% returns of the secondary benchmark, the Russell 2500 Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Meridian Contrarian Fund highlighted stocks such as Radius Recycling, Inc. (NASDAQ:RDUS). Radius Recycling, Inc. (NASDAQ:RDUS) is a scrap metal recycling company that engages in the recycling of ferrous and nonferrous metals. The one-month return of Radius Recycling, Inc. (NASDAQ:RDUS) was 0.34%, and its shares have appreciated by 72.59% over the past 52 weeks. On May 29, 2025, Radius Recycling, Inc. (NASDAQ:RDUS) closed at $29.53 per share, with a market capitalization of $832.8 million.

Meridian Contrarian Fund stated the following regarding Radius Recycling, Inc. (NASDAQ:RDUS) in its Q1 2025 investor letter:

“Radius Recycling, Inc. (NASDAQ:RDUS) is a leading scrap metal recycler and global manufacturer of finished steel products. Its vertically integrated model—from automotive recycling to final steelmaking capabilities—offers distinct competitive advantages. We invested based on our view that recent growth investments would allow the company to capture more value through the recycling chain. The stock had been trading below the replacement value of its unique, difficult-to-replicate assets, offering what we viewed as a compelling margin of safety. Our thesis played out more rapidly than we expected when the company agreed to be acquired by Toyota Tsusho America. We liquidated our position during the quarter following the announcement.”

A towering metal stack of ferrous and nonferrous metals, highlighting the scale of metal recycling.

Radius Recycling, Inc. (NASDAQ:RDUS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held Radius Recycling, Inc. (NASDAQ:RDUS) at the end of the first quarter, which was 23 in the previous quarter. While we acknowledge the potential of Radius Recycling, Inc. (NASDAQ:RDUS) 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 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.