Core Insights - Longleaf Partners Small-Cap Fund reported a return of 2.03% in Q3 2025, underperforming compared to the Russell 3000's 8.18% and the Russell 2000's 12.39% [1] - The fund highlighted Graham Holdings Company (NYSE:GHC) as a key investment, noting its one-month return of 7.24% and a 52-week gain of 17.07% [2][3] Fund Performance - Longleaf Partners Small-Cap Fund's performance in Q3 2025 was significantly lower than major indices, indicating potential challenges in the small-cap sector [1] - The fund's top five holdings for 2025 are available for further insights into its investment strategy [1] Company Analysis: Graham Holdings Company - Graham Holdings Company (NYSE:GHC) is characterized as a diversified holding company with a market capitalization of $4.834 billion and a closing stock price of $1,108.03 on December 1, 2025 [2] - The company has shown strong performance, with value-per-share growth in the mid-single-digit percentage range, and is positioned to benefit from increased M&A activity in the broadcast television sector [3] Hedge Fund Interest - As of the end of Q3 2025, 23 hedge fund portfolios held shares of Graham Holdings Company, an increase from 20 in the previous quarter, indicating growing interest among institutional investors [4] - Despite this interest, some analysts suggest that certain AI stocks may present better investment opportunities with higher upside potential and lower risk [4]

Core Insights - The article discusses the expertise of Sensor Unlimited, who has a PhD in financial economics and has been covering the mortgage market, commercial market, and banking industry for the past decade [2] Group 1: Company Overview - Sensor Unlimited focuses on asset allocation and ETFs related to the overall market, bonds, banking and financial sectors, and housing markets [2] - The company offers two model portfolios: one for short-term survival/withdrawal and another for aggressive long-term growth [2] Group 2: Services Offered - Features include direct access via chat for discussing ideas, monthly updates on all holdings, tax discussions, and ticker critiques by request [2]

Core Insights - Graham Corporation (GHM) has experienced significant price appreciation, with an increase of nearly 40% year-to-date and 6.71% over the last month, driven by enhanced profitability, strong order flow, and improved guidance over the past 11 months [1] Financial Performance - The company's profitability has shown a notable increase, contributing to the overall positive market performance [1] - Strong orders have been a key factor in the company's growth trajectory, indicating robust demand for its products [1] Market Outlook - The guidance provided by the company has been upgraded, reflecting confidence in future performance and growth potential [1] - The overall market sentiment towards GHM appears to be positive, supported by the recent financial metrics and operational improvements [1]

Core Viewpoint - Graham Holdings Company has announced the pricing of $500 million in senior unsecured notes due 2033, indicating a strategic move to raise capital through debt issuance [1] Group 1: Financial Details - The total principal amount of the notes is $500 million [1] - The notes will have a coupon rate of 5.625% per annum, with interest payments scheduled semi-annually on June 1 and December 1, starting from June 1, 2026 [1] - The notes will be guaranteed on a senior unsecured basis by certain existing and future domestic subsidiaries of the company [1]

Core Viewpoint - Graham Holdings Company plans to offer $500 million in senior unsecured notes due 2033, subject to market conditions [1] Group 1 - The offering will consist of an aggregate principal amount of $500 million [1] - The notes will be guaranteed on a senior unsecured basis by certain existing and future domestic subsidiaries of the company [1] - The company intends to amend certain agreements concurrently with the offering of the notes [1]

Company Overview - Graham Corporation (GHM) is a small-cap industrial machinery stock with a market capitalization of approximately $700 million, recognized for its expertise in producing essential equipment and technologies for the Defense, Energy, and Space Industries [1]

Core Points - Graham Holdings Company will hold a virtual Investor Day on December 9, 2025 [1] - The event will take place from 1:00 p.m. to 2:30 p.m. Eastern Time (ET) [1] - The webcast will include audio and presentation slides discussing the Company's operations and financials [1] - The management team of Graham Holdings will present during the event [1] - Registration for the event is required, and details can be found on the Company's website [1]

Core Insights - Graham (GHM) reported quarterly earnings of $0.31 per share, missing the Zacks Consensus Estimate of $0.33 per share, representing an earnings surprise of -6.06% [1] - The company posted revenues of $66.03 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 12.67% and up from $53.56 million year-over-year [2] - Graham shares have increased approximately 39.7% year-to-date, outperforming the S&P 500's gain of 14.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.27 on revenues of $52.61 million, and for the current fiscal year, it is $1.42 on revenues of $230.61 million [7] - The estimate revisions trend for Graham was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Manufacturing - General Industrial industry, to which Graham belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Core Insights - Graham Corporation reported strong performance in the second quarter of fiscal 2026, with a record backlog of $500.1 million and healthy demand across its end markets, particularly in Defense and Space sectors [3][5][16]. Financial Performance - Net sales increased by 23% to $66.0 million compared to $53.6 million in the same quarter last year [5][7]. - Gross profit rose by 12% to $14.3 million, with a gross profit margin of 21.7%, down 220 basis points from the previous year [5][8]. - Net income per diluted share was $0.28, while adjusted net income per diluted share was $0.31, reflecting no change from the prior year [5][39]. - Adjusted EBITDA increased by 12% to $6.3 million, with an adjusted EBITDA margin of 9.5% [5][39]. Orders and Backlog - Orders for the quarter totaled $83.2 million, resulting in a book-to-bill ratio of 1.3x [5][14]. - The backlog at the end of the quarter was a record $500.1 million, a 23% increase year-over-year, with approximately 85% of the backlog attributed to the Defense industry [5][16]. Market Segments - Sales in the Defense market contributed $9.9 million to growth, driven by project milestones and new programs [7]. - The Energy & Process market saw an 11% increase in sales, primarily due to growth in China, although sales in India decreased due to project timing [7]. Cash Management and Balance Sheet - The company maintained a strong balance sheet with no debt, $20.6 million in cash, and access to $44.7 million under its revolving credit facility [5][11]. - Cash provided by operating activities for the quarter was $13.6 million [10]. Strategic Outlook - The company is focused on high-return initiatives to enhance productivity and profitability, including investments in automation and advanced testing technologies [3][5]. - Full-year fiscal 2026 guidance remains unchanged, with expectations for revenue between $225 million and $235 million and adjusted EBITDA between $22 million and $28 million [19][21].

Core Viewpoint - Graham Corporation has secured multiple orders valued at approximately $22 million from leading Space/Aerospace customers, indicating strong momentum in its commercial space business [1][2]. Group 1: Orders and Revenue - During its fiscal second and third quarters, Graham's subsidiary Barber-Nichols LLC booked new orders for advanced turbomachinery and precision-engineered components from six major players in the commercial space launch market, expected to convert into revenue over the next 12 to 24 months [2]. - The recent orders highlight Graham's expanding role as a critical supplier for next-generation space systems [2]. Group 2: Investment in Capacity - To meet the increasing demand, Graham is investing in production capacity at its Barber-Nichols facility in Colorado, which includes new CNC machining centers and a liquid nitrogen test stand [3]. - These investments complement the construction of a cryogenic test facility near its P3 Technologies subsidiary in Jupiter, Florida, expected to open later this year [3]. Group 3: Market Position and Strategy - The company is experiencing strong momentum from both new and existing customers in the space sector, reflecting its long-term commitment to the industry and key development programs [4]. - Graham's expertise in high-speed rotating equipment and precision manufacturing positions it as a trusted supplier for complex, high-performance systems, reinforcing its strategy to diversify its portfolio across high-growth, technology-driven applications [4].