What Makes Construction Partners (ROAD) a High-Growth Business?

Polen Capital, an investment management company, released its “Polen US SMID Company Growth Strategy” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The initial market optimism after the Presidential election gave way to fear and uncertainty in the first quarter of 2025. Against this backdrop, the fund returned -12.38% gross, and -12.65% net of fees compared to the Russell 2500 Growth Index return of -10.80%. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2025.

In its first-quarter 2025 investor letter, Polen US SMID Company Growth Strategy highlighted stocks such as Construction Partners, Inc. (NASDAQ:ROAD). Construction Partners, Inc. (NASDAQ:ROAD) is a civil infrastructure company that constructs and maintains roadways. The one-month return of Construction Partners, Inc. (NASDAQ:ROAD) was 8.08%, and its shares gained 97.73% of their value over the last 52 weeks.  On June 6, 2025, Construction Partners, Inc. (NASDAQ:ROAD) stock closed at $110.36 per share, with a market capitalization of $6.184 billion.

Polen US SMID Company Growth Strategy stated the following regarding Construction Partners, Inc. (NASDAQ:ROAD) in its Q1 2025 investor letter:

“During the quarter, we added five new positions in SAIA, Construction Partners, Inc. (NASDAQ:ROAD), Comfort Systems USA, Wingstop, and Manhattan Associates. We also added to several existing positions.

Construction Partners is the leading paving operator in the Southeast U.S. The business is most acutely tied to repairing and replacing aging road infrastructure, which tends to be driven by long-term maintenance plans controlled by local and state government projects. The business has a highly competent management team and a skilled consolidator. The company has reached a scale where its margins and returns benefit from vertical integration of the liquid asphalt terminal and hot mix asphalt plants. This allows the company to capture more industry margin while strengthening its competitive position. Despite being tied to a stable stream of maintenance projects, Construction Partners is a high-growth business due to its long runway of acquisition and industry consolidation opportunities.”

Construction Partners, Inc. (ROAD): Among Most Expensive Stocks Insiders Are Buying After Trump’s Tariff Rollout

An aerial view of a bridge under construction with workers continuing their work despite the early morning light.

Construction Partners, Inc. (NASDAQ:ROAD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held Construction Partners, Inc. (NASDAQ:ROAD) at the end of the first quarter, which was 21 in the previous quarter. Construction Partners, Inc.’s (NASDAQ:ROAD) revenue was $571.7 million in Q1 2025, marking an increase of 54% compared Q1 2024. While we acknowledge the potential of Construction Partners, Inc. (NASDAQ:ROAD) 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 Construction Partners, Inc. (NASDAQ:ROAD) and shared Conestoga Capital Advisors’ views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.