Ducommun (DCO) is Benefitting From Strong Demand

Core Insights - Diamond Hill Capital's "Small Cap Strategy" underperformed the Russell 2000 Index in Q3 2025, returning 7.93% compared to the index's gain of over 12% [1] - The underperformance was attributed to the rally being driven by sectors not typically held in the portfolio [1] Company Overview: Ducommun Incorporated (NYSE:DCO) - Ducommun Incorporated provides engineering and manufacturing services to aerospace, defense, industrial, and medical sectors [2] - The stock experienced a one-month return of -6.24% but gained 31.04% over the last 52 weeks, closing at $87.27 with a market capitalization of $1.304 billion on November 24, 2025 [2] Performance and Market Position - Ducommun was highlighted as a top contributor in Q3, benefiting from its role as a Tier 1 and Tier 2 supplier for advanced material aerostructures and electrical components [3] - The company is expected to match Boeing's production rate of the 737 Max by mid-2026, with Boeing producing at a rate of 38 per month, potentially increasing to 42 [3] - Ducommun is also experiencing strong demand in its missile programs due to heightened geopolitical tensions [3] Financial Performance - In Q3 2025, Ducommun reported record quarterly revenue of $212.6 million, reflecting a 6% increase year-over-year [4] - The number of hedge funds holding Ducommun shares increased from 15 to 20 in the second quarter [4]