Fund Exits $5 Million Knife River Position as Stock Drops 31% in One Year

On January 28, Headland Capital disclosed in an SEC filing that it sold out its entire position in Knife River (NYSE:KNF), an estimated $4.89 million transaction based on quarterly average pricing.

What happened

According to its SEC filing dated January 28, Headland Capital sold all 63,636 shares of Knife River (NYSE:KNF), with the estimated transaction value at approximately $4.89 million based on quarterly average pricing.

What else to know

Top holdings after the filing:

• NYSEMKT:SPY: $78.84 million (21.9% of AUM)
• NYSE:PGR: $45.47 million (12.7% of AUM)
• NYSEMKT:SPDW: $25.22 million (7.0% of AUM)
• NYSEMKT:IVV: $20.15 million (5.6% of AUM)
• NASDAQ:BSCV: $19.19 million (5.3% of AUM)

As of January 27, shares of Knife River were priced at $68.59, down 31.4% over the past year and well underperforming the S&P 500 by 47.5 percentage points.

Company overview

Company snapshot

• Knife River produces and sells construction aggregates, asphalt, and ready-mix concrete; provides contracting services for heavy-civil construction, paving, and site development.
• The company generates revenue through the extraction, processing, and sale of aggregates and related materials, as well as through construction contracting services supporting public infrastructure projects.
• It serves federal, state, and municipal governments, with a focus on highways, bridges, airports, schools, and other public infrastructure developments.

Knife River is a leading U.S.-based supplier of aggregates-based construction materials and related contracting services, operating across multiple regional segments. The company leverages its vertically integrated model to provide end-to-end solutions for infrastructure projects, from material production to project execution. Its scale, diversified geographic presence, and focus on public-sector clients position it as a key participant in the construction materials industry.

What this transaction means for investors

It’s been a difficult year for Knife River despite a solid recent earnings report. In its latest release, the company delivered record third-quarter revenue of $1.2 billion, up 9% year over year, driven largely by acquisitions and pricing gains. Adjusted EBITDA, meanwhile, climbed 11% to $272.8 million, while backlog reached a record $995 million, with roughly 87% tied to public infrastructure projects and most converting within a year. On paper, that looks like a business executing through mixed macro conditions.

But the market has been far less forgiving. Shares are down more than 31% over the past year, vastly underperforming the S&P 500. Margins have come under pressure in certain regions, and weather disruptions weighed on volumes. In Oregon, the company says it's working to "right-size" its team and find operating efficiencies. For a fund like Headland Capital, that risk profile may no longer fit. Knife River’s growth story now hinges on flawless execution, margin recovery, and disciplined balance sheet management at a time when patience is being tested.

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