Knife River Stock Has Tumbled 31% This Past Year, but One Fund Placed a $22 Million Bet on a Turnaround

On January 28, Paradice Investment Management disclosed a new position in Knife River (NYSE:KNF), acquiring 312,743 shares in the fourth quarter in a trade valued at $22.00 million given quarter-end prices.

What happened

According to a Securities and Exchange Commission (SEC) filing dated January 28, Paradice Investment Management established a new stake in Knife River, purchasing 312,743 shares during the fourth quarter. The post-trade position was valued at $22.00 million at quarter end, reflecting both the acquisition and stock price movement.

What else to know

This new holding represented 4.28% of Paradice’s 13F reportable assets at the end of December.

Top five holdings after the filing:

• NYSE:GMED: $46.10 million (9.0% of AUM)
• NASDAQ:TNDM: $45.67 million (8.9% of AUM)
• NYSE:NVST: $37.11 million (7.2% of AUM)
• NYSE:LEA: $36.86 million (7.2% of AUM)
• NYSE:FLS: $35.84 million (7.0% of AUM)

As of January 27, Knife River shares were priced at $68.59, down 31.4% over the past year and vastly underperforming the S&P 500 by 47.46 percentage points.

Company overview

Company snapshot

• Knife River provides aggregates-based construction materials, including crushed stone, sand, gravel, asphalt, and ready-mix concrete, and offers contracting services for heavy-civil construction projects.
• The company generates revenue by extracting, processing, and selling construction aggregates and related materials, as well as by delivering infrastructure contracting services such as paving and site development.
• Primary customers include federal, state, and municipal governments, with a focus on public infrastructure projects such as highways, bridges, airports, and public buildings.

Knife River is a leading U.S. provider of construction materials and contracting services, with a diversified presence across multiple regions. The company leverages vertical integration in aggregates, asphalt, and ready-mix concrete to serve large-scale infrastructure and public works projects. Its established market position and broad customer base support stable revenue streams and operational scale in the construction materials sector.

What this transaction means for investors

This move matters because it reflects a clear rotation toward assets with visible demand and pricing power rather than exposure tied to longer-cycle industrial uncertainty. After fully exiting one industrial holding (Chart Industries), Paradice redeployed capital into a business where earnings are increasingly driven by backlog, public funding, and recent acquisitions that are already showing up in results.

Knife River’s latest quarter helps explain the appeal. Revenue rose 9% year over year to $1.2 billion, while adjusted EBITDA climbed 11% to $272.8 million, driven in part by acquired operations and pricing discipline across aggregates and ready-mix. Most notable is backlog, which reached a record $995 million, up 32% from a year earlier, with 87% tied to public work and more than three-quarters expected to convert to revenue within 12 months.

The company also continues to invest aggressively, spending $528 million on acquisitions in the first nine months of the year, while maintaining net leverage around 2.6 times adjusted EBITDA and targeting further improvement by year's end. Compared with Paradice’s other holdings, this position adds exposure to infrastructure spending with nearer-term cash flow support.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Globus Medical. The Motley Fool recommends Flowserve. The Motley Fool has a disclosure policy.