Mairs & Power Details Q3 Moves as AI Leaders Concentrate 2025 Gains

Overview

• The Small Cap Fund returned 2.06% through the first nine months of 2025, trailing the Russell 2000 TR, S&P Small Cap 600 TR, and Morningstar U.S. Fund Small Blend benchmarks.
• MGP Ingredients was cited as a detractor as it works through excess bourbon inventory tied to GLP‑1‑related shifts in alcohol consumption, while Knife River slowed on funding worries, weather, and environmental delays.
• New Small Cap positions included Patrick Industries, benefiting from outsourcing trends in RV, marine, and housing channels, and Trex, added at what the firm viewed as an attractive valuation after housing concerns pressured shares.
• James Hardie was added to the Small Cap Fund following its acquisition of AZEK, with the manager pointing to potential product innovation sharing and cross‑selling.
• The Growth Fund initiated Cognex on expectations for AI‑accelerated adoption of machine vision and onshoring benefits and added Palo Alto Networks due to rising AI‑enabled cyber threats, while the Balanced Fund opened Amazon, flagged Fiserv’s lowered Clover guidance as a drag, and noted Entegris lagged after guidance fell short.