Why One Fund Cut a $4.1 Million Stake Amid Interface’s Blowout $364.5 Million Quarter

1 month ago 17

Jonathan Ponciano, The Motley Fool

Mon, December 8, 2025 astatine 2:50 AM CST 5 min read

Dallas-based Meros Investment Management reduced its Interface holding by 259,973 shares successful the 3rd quarter.
The worth of the presumption alteration was astir $4.1 cardinal from 4th to quarter.
After the transaction, the money held 166,576 shares of Interface valued astatine $4.8 cardinal arsenic of September 30.
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On November 14, Dallas-based Meros Investment Management disclosed it sold 259,973 shares of Interface (NASDAQ:TILE) successful the 3rd quarter, reducing its presumption by astir $4.1 million.

According to a U.S. Securities and Exchange Commission (SEC) filing dated November 14, Meros Investment Management sold 259,973 shares of Interface (NASDAQ:TILE) during the 3rd quarter. The fund’s remaining involvement stands astatine 166,576 shares, worthy $4.8 cardinal astatine quarter-end.

The merchantability reduced Interface to 2.1% of reportable AUM; successful the anterior quarter, the presumption was 4.24% of money AUM.

Top 5 holdings arsenic of the filing:

NYSE: DCO: $16 cardinal (6.8% of AUM)
NYSE: PLYM: $14.6 cardinal (6.2% of AUM)
NASDAQ: MGNI: $13.4 cardinal (5.7% of AUM)
NYSE: SEI: $11.7 cardinal (5% of AUM)
NASDAQ: PLAB: $11.6 cardinal (4.9% of AUM)

As of Friday, Interface shares were priced astatine $27.32, up astir 5% implicit the past twelvemonth and good underperforming the S&P 500, which is up 13% successful the aforesaid period.

Metric

Value

Market Capitalization	$1.6 billion
Revenue (TTM)	$1.4 billion
Net Income (TTM)	$113 million
Price (as of marketplace adjacent Friday)	$27.32

Interface offers modular carpet tiles, resilient flooring, rubber flooring, luxury vinyl tile, antimicrobial chemic compounds, adhesives, and installation services nether brands specified arsenic Interface, FLOR, norament, noraplan, and Intersept.
The institution generates gross done nonstop income to end-users, indirect income via contractors and distributors, and online channels, complemented by task absorption and attraction services.
It serves commercialized clients successful offices, healthcare, education, hospitality, retail, and authorities sectors, arsenic good arsenic residential customers globally.

Interface, Inc. is simply a modular flooring institution with a diversified merchandise portfolio and some nonstop and indirect income channels serving commercialized and residential markets. Interface, Inc. sells a scope of modular flooring products and related services to customers successful galore industries worldwide.

The value of Meros trimming its Interface presumption comes down to timing: The institution conscionable delivered 1 of its strongest quarters successful years, posting expanded margins and raising full-year guidance. A money taking profits aft a rally to all-time highs alternatively than exiting owed to deteriorating fundamentals sends a precise antithetic awesome — and investors should work this determination arsenic portfolio rebalancing, not a thesis break. Interface’s third-quarter results reenforce that point: Net income roseate 5.9% to $364.5 million, and GAAP EPS surged 62.5% year-over-year to $0.78, with adjusted EPS up 27% to $0.61. Management besides raised full-year guidance, present expecting astir $1.38 to $1.39 cardinal successful income and higher adjusted gross margins.

Despite volatile trading and a banal inactive lagging the broader marketplace implicit the past year, Interface’s operating momentum and beardown currency procreation — $76.7 cardinal successful the 3rd 4th unsocial — presumption it good for semipermanent worth creation.