Turning Point Brands (TPB) Raised Its Growth and Profit Outlook. Here’s Why

TPB -1.19%

Meridian Funds, managed by ArrowMark Partners, released its third-quarter 2025 investor letter for the “Meridian Small Cap Growth Fund.” A copy of the letter can be downloaded here. Driven by continued gains in technology and falling bond yields, equities reached record highs in the quarter. U.S. small caps outperformed in the quarter, gaining 12.4%, while large caps returned 5.3%. Among small caps, value stocks slightly surpassed growth stocks, returning 12.6% and 12.2%, respectively, according to Russell indices. In this environment, the fund returned 4.20% (net) in the third quarter compared to the Russell 2000 Growth Index’s 12.19% return. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Meridian Small Cap Growth Fund highlighted stocks such as Turning Point Brands, Inc. (NYSE:TPB). Headquartered in Louisville, Kentucky, Turning Point Brands, Inc. (NYSE:TPB) manufactures, markets, and distributes branded consumer products that operate in Zig-Zag Products and Stoker's Products segments. The one-month return of Turning Point Brands, Inc. (NYSE:TPB) was -3.22%, and its shares gained 54.73% of their value over the last 52 weeks. On December 02, 2025, Turning Point Brands, Inc. (NYSE:TPB) stock closed at $97.90 per share, with a market capitalization of $1.867 billion.

Meridian Small Cap Growth Fund stated the following regarding Turning Point Brands, Inc. (NYSE:TPB) in its third quarter 2025 investor letter:

"Turning Point Brands, Inc. (NYSE:TPB) is a producer of branded consumer products, including alternative smoking accessories, continued to see strength in its nicotine pouch business. The product delivered more than 651% year-over year revenue growth, exceeding expectations and becoming an increasingly meaningful contributor to the company’s overall business. This performance has led the company to raise its growth and profit outlook for the year, as it continues to gain market share in an expanding category. The brand is also gaining traction in direct-to-consumer distribution while benefiting from the strong in-store presence of Turning Point’s established brands, including Stokers and Zig-Zag. During the period, we trimmed our position in Turning Point as the share price appreciated, in line with our disciplined valuation approach."

Turning Point Brands, Inc. (NYSE:TPB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held Turning Point Brands, Inc. (NYSE:TPB) at the end of the third quarter, which was 35 in the previous quarter. Third quarter revenue of Turning Point Brands, Inc. (NYSE:TPB) increased 31% to $119 million. While we acknowledge the potential of Turning Point Brands, Inc. (NYSE:TPB) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Turning Point Brands, Inc. (NYSE:TPB) and shared a bullish thesis on the company. In addition, please check out our hedge fund investor letters Q3 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.