| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 20.3% | 1.7% | 14.4% |
| 2025 |
|---|
| 14.4% |
Minot Light Capital delivered 14.4% net returns in 2025, outperforming the Russell 2000 but lagging the IWC microcap index. The managers embrace unprecedented volatility in small/micro-caps, viewing it as creating exceptional opportunities to buy below fair value and sell above fair value. They believe momentum has become an over-owned factor, with quantitative and systematic funds dominating over fundamental analysis. Key lessons from 2025 include positioning more strongly to capitalize on volatility, closing performance leakages from unforced errors, anchoring downside protection more firmly, and being more aggressive about increasing position sizes in emerging growth stories as they de-risk. The portfolio suffered from stock-specific issues and tax-loss selling in December, but many headwinds reversed in early 2026. The managers modified their process to require greater stringency around secondary lines of defense like cash on balance sheets and minimal debt, while maintaining focus on probability-weighted risk/reward analysis for strong absolute returns.
Minot Light Capital believes there is compelling opportunity in the small and micro-cap space for their strategy to generate meaningful long-term capital appreciation by capitalizing on unprecedented market volatility and momentum-driven inefficiencies.
The managers express stronger confidence than ever that their process is sound, sustainable, and scalable after their first full year. They believe there is compelling opportunity in small and micro-cap space for meaningful long-term capital appreciation, with the greatest inefficiencies and alpha potential at two extremes: emerging winners at earliest development stages that start de-risking, and small-cap stocks experiencing maximum downward momentum.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 18 2026 | 2025 Q4 | ARQ, CBLL, CLPT, CURV, KRMD, LAKE, LUCD, MAMA, MRVI, NEOG, OM, OWLT, REAL, RXST, RZLT, SWAG, XOMA | Biotech, growth, momentum, Process, small caps, value, volatility |
XOMA RZLT ARQ OM |
The managers describe unprecedented speed and magnitude of volatility in small/micro-cap space, calling some institutional liquidations violent. They embrace this volatility as it creates opportunities… |
| Oct 19 2025 | 2025 Q3 | ARQ, CLPT, CURV, LGCY, LUCD, REAL, SWAG | Biotech, Consumer Stocks, Growth Investing, Life Sciences, small caps |
REAL CLPT ARQ CURV LUCD SWAG |
The fund gained modestly but lagged benchmarks as healthcare holdings weighed on results. Managers spotlight RealReals AI-enabled resale growth and industrial cleaner Arqs carbon business… |
| Jul 31 2025 | 2025 Q2 | CURV, LAKE, LGCY, OM, RXST, TDUP, TTGT | dislocations, early-stage growth, Inefficiency, liquidity, Microcaps |
TDUP LGCY OM |
The commentary highlights extreme inefficiencies in micro-cap equities driven by liquidity constraints and institutional neglect. Management focuses on early-stage growth and violent dislocations where prices… |
| Apr 30 2025 | 2025 Q1 | CYRX | Biotech, Consumer Stocks, Growth Investing, Life Sciences, small caps | - | - |
| Dec 31 2024 | 2024 Q4 | DERM, MYTE, REAL, TDUP | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Momentum2025 was characterized by extreme momentum dynamics with capital flowing into immediate winners while perceived losers saw unprecedented pressure. Market leadership concentrated in lower-quality, speculative, and cyclically sensitive stocks. The momentum trade has been exceptionally profitable short-term but timing the inevitable reversal remains challenging. |
Cyclical Speculation Leadership Volatility Reversal |
Small CapsSmall caps getting strong start in 2026 supported by easing monetary conditions and constructive fiscal backdrop. Small caps more sensitive to economic cyclicality which is overdue for expansion. Expected to grow at better pace than large caps in 2026 after long period of underperformance. |
Value Growth Cyclical Monetary Policy Fiscal Policy | |
VolatilityMarket volatility in spring 2025 triggered by trade tariff uncertainty led to a broad sell-off, with strategies down over 23% year-to-date at the trough. The manager used this volatility to add exposure at attractive prices during the decline. |
Market volatility Sell-off Opportunity Exposure Timing | |
| 2025 Q3 |
ConsumerThe consumer segment includes DJL Petfoods (pet food ingredients distributor) and TSDC Wholesale (food and grocery wholesale). DJL exemplifies RDCP 2.0 characteristics as an asset-light but infrastructure-critical business with long-standing customer relationships, exceptional retention rates, and exposure to growing pet ownership and premiumisation trends. These businesses benefit from structural advantages and recurring revenue streams. |
Pet Care Food Distribution Consumer Staples Wholesale Distribution |
HealthcareHealthcare was the strongest relative contributor in the quarter with holdings increasing nearly +16% compared to benchmark returns of roughly +12%. Exact Sciences was acquired for a significant premium by Abbott Laboratories resulting in an +86% return, while other strong performers included Tarsus Pharmaceuticals, Glaukos following approval of a new product, Penumbra, and Repligen driven by strong earnings results. |
M&A Product Approval Earnings Biotech | |
Small CapsSmall caps getting strong start in 2026 supported by easing monetary conditions and constructive fiscal backdrop. Small caps more sensitive to economic cyclicality which is overdue for expansion. Expected to grow at better pace than large caps in 2026 after long period of underperformance. |
Value Growth Cyclical Monetary Policy Fiscal Policy | |
| 2025 Q2 |
MicroCaps |
|
| 2025 Q1 |
ConsumerThe consumer segment includes DJL Petfoods (pet food ingredients distributor) and TSDC Wholesale (food and grocery wholesale). DJL exemplifies RDCP 2.0 characteristics as an asset-light but infrastructure-critical business with long-standing customer relationships, exceptional retention rates, and exposure to growing pet ownership and premiumisation trends. These businesses benefit from structural advantages and recurring revenue streams. |
Pet Care Food Distribution Consumer Staples Wholesale Distribution |
HealthcareHealthcare was the strongest relative contributor in the quarter with holdings increasing nearly +16% compared to benchmark returns of roughly +12%. Exact Sciences was acquired for a significant premium by Abbott Laboratories resulting in an +86% return, while other strong performers included Tarsus Pharmaceuticals, Glaukos following approval of a new product, Penumbra, and Repligen driven by strong earnings results. |
M&A Product Approval Earnings Biotech | |
Small CapsSmall caps getting strong start in 2026 supported by easing monetary conditions and constructive fiscal backdrop. Small caps more sensitive to economic cyclicality which is overdue for expansion. Expected to grow at better pace than large caps in 2026 after long period of underperformance. |
Value Growth Cyclical Monetary Policy Fiscal Policy |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 31, 2025 | Fund Letters | Eddie Reilly | TDUP | ThredUp Inc. | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NASDAQ | Apparel, Logistics, Margins, Resale, scale, Sustainability | Login |
| Jul 31, 2025 | Fund Letters | Eddie Reilly | LGCY | Legacy Education Alliance, Inc. | Consumer Discretionary | Diversified Consumer Services | Bull | Dubai Financial Market | Demand, Education, Margins, restructuring, Scalability, turnaround | Login |
| Jul 31, 2025 | Fund Letters | Eddie Reilly | OM | Outset Medical, Inc. | Health Care | Health Care Equipment | Bull | NASDAQ | Adoption, Consumables, Devices, Dialysis, innovation, Reimbursement | Login |
| Jan 18, 2026 | Fund Letters | Eddie Reilly | XOMA | XOMA Royalty Corporation | Health Care | Biotechnology | Bull | NASDAQ | Biotech, Optionality, platform, royalties, Volatility | Login |
| Jan 18, 2026 | Fund Letters | Eddie Reilly | RZLT | Rezolute, Inc. | Health Care | Biotechnology | Bull | NASDAQ | Biotech, Dislocation, Netcash, pipeline, Rebound | Login |
| Jan 18, 2026 | Fund Letters | Eddie Reilly | ARQ | Arq, Inc. | Industrials | Chemicals | Bear | NASDAQ | Balance_Sheet, Capacity, cashflow, Delays, Executionrisk | Login |
| Jan 18, 2026 | Fund Letters | Eddie Reilly | OM | Outset Medical, Inc. | Health Care | Health Care Equipment | Bull | NASDAQ | Medical devices, Netcash, recurring revenue, Tax-loss, turnaround | Login |
| Oct 19, 2025 | Fund Letters | Eddie Reilly | REAL | The RealReal, Inc. | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NASDAQ | AI, Authentication, Consignors, network effects, operating leverage, profitability, Resale | Login |
| Oct 19, 2025 | Fund Letters | Eddie Reilly | CLPT | ClearPoint Neuro, Inc. | Health Care | Health Care Equipment & Supplies | Bull | NASDAQ | Cell and gene therapy, Disposables, Installed base, Neurosurgery, pipeline, Reimbursement, switching costs | Login |
| Oct 19, 2025 | Fund Letters | Eddie Reilly | ARQ | Arq, Inc. | Industrials | Specialty Chemicals | Bull | NASDAQ | Activated-carbon, Capacity, Margins, Pfas, Pricing, Ramp, vertical integration | Login |
| Oct 19, 2025 | Fund Letters | Eddie Reilly | CURV | Torrid Holdings Inc. | Consumer Discretionary | Apparel Retail | Bull | NYSE | Apparel, deleveraging, Free Cash Flow, Margins, Omnichannel, Store-closures, tariffs | Login |
| Oct 19, 2025 | Fund Letters | Eddie Reilly | LUCD | Lucid Diagnostics Inc. | Health Care | Health Care Equipment & Supplies | Bull | NASDAQ | Catalysts, Clinical-utility, diagnostics, Dilution, Governance, Reimbursement, TAM | Login |
| Oct 19, 2025 | Fund Letters | Eddie Reilly | SWAG | Stran & Company, Inc. | Communication Services | Specialty Business Services | Bull | NASDAQ | Acquisitions, FCF, Integration, Ncav, Pricing, Promotional-products, scale | Login |
| TICKER | COMMENTARY |
|---|---|
| ARQ | Unfortunately, in the fourth quarter, ARQ suffered very expensive delays in its efforts to bring on the GAC capacity we were counting on to drive growth going forward. In fact, these issues seem to now go beyond simple delays and into a potential questioning of their core underlying production methodology. This has led to a significant reduction in cash flow expectations, which has also brought the company's balance sheet into play. |
| CBLL | The share price of Ceribell, a leader in portable electroencephalogram (EEG) technology, surged 91% after reporting inline financial results and elevating its sales outlook for the remainder of its fiscal year. The recent FDA clearance for the company's Clarity algorithm for neonates significantly broadens Ceribell's total addressable markets and is expected to enable an earlier-than-anticipated neonatal launch. |
| CLPT | Clearpoint being a razor/razor blade company that, among other things, enables neurological drug delivery. Both companies are leveraged to a broad portfolio of partnered products that should drive their growth over the long-term. Though this was disappointing from a near-term performance dynamic, we still own both companies, as we continue to believe they have bright futures ahead with many more shots on goal. |
| CURV | The most egregious of these that we took were Torrid Holdings (CURV) and Lucid Diagnostics (LUCD). These stand out due to the size of the losses, as well as the red flags around leverage and corporate governance that we put on the back-burner when we bought the stocks, which eventually came back to bite us. |
| KRMD | stocks scaling very nicely and entering the small-cap sweet spot (REAL, MAMA, CBLL, KRMD). |
| LAKE | LAKE was our weakest performer in 4Q25, declining 45.31%. We had reduced our position ahead of its FY3Q26 report, as we thought there could be some weaknesses in sales and merger integration. While results were weaker than expected, we believe the share price decline was an overreaction, amplified by year-end tax-loss selling. LAKE retains a strong balance sheet, and we see a clear path to revenue growth in the global fire protection market through both organic initiatives and acquisitions. We also note that following the quarter a new holder filed a 13D and now owns 8.38% of the shares. |
| LUCD | The most egregious of these that we took were Torrid Holdings (CURV) and Lucid Diagnostics (LUCD). These stand out due to the size of the losses, as well as the red flags around leverage and corporate governance that we put on the back-burner when we bought the stocks, which eventually came back to bite us. |
| MAMA | stocks scaling very nicely and entering the small-cap sweet spot (REAL, MAMA, CBLL, KRMD). |
| MRVI | and out-of-favor recovery stocks (RXST, NEOG, MRVI). |
| NEOG | and out-of-favor recovery stocks (RXST, NEOG, MRVI). |
| OM | This was by far the biggest loser for the quarter, as the company missed earnings and experienced a massive sell-off that was, in our opinion, most likely compounded by significant tax-loss selling by some very large institutions that seemed to become price insensitive towards year-end. OM closed 2025 at $3.71/share and bottomed around $3.30/share in 4Q25, despite the fact it had $4.55 of net cash per share on the balance sheet and current assets less all liabilities was $7.11/share. We feel the company is on track to do about $125M in sales, of which a good portion consists of high-margin recurring revenue. For all these reasons, we substantially increased our position in OM during the third and fourth quarters, making it the largest position in our fund. Thankfully, the share price decline has reversed in early 2026 and the stock has now rebounded to $5.50/share as of Jan 15, 2026 following a positive earnings preannouncement. |
| OWLT | Without speaking to any specific winners in 4Q25, they represent a nice mix of early-stage emerging growth stocks (SWAG, OWLT). |
| REAL | stocks scaling very nicely and entering the small-cap sweet spot (REAL, MAMA, CBLL, KRMD). |
| RXST | and out-of-favor recovery stocks (RXST, NEOG, MRVI). |
| RZLT | On the day of its adverse data read-out, XOMA's partner, Rezolute (RZLT), fell over 90% and traded well below net cash value, despite having another potential billion dollar indication in its pipeline. We were able to purchase shares of RZLT that morning and the stock has more than doubled from our cost-basis in short order. |
| SWAG | Without speaking to any specific winners in 4Q25, they represent a nice mix of early-stage emerging growth stocks (SWAG, OWLT). |
| XOMA | We consider both of these companies to be platform companies, with XOMA operating in the biotech royalty space. Both stocks had been winners for Minot Light due to excitement around the potential for near-term data read-outs and approvals of partner products that would have been nice contributors to long-term growth. Unfortunately, in both cases, we experienced disappointing data and/or regulatory outcomes during the fourth quarter and the stocks corrected. Though this was disappointing from a near-term performance dynamic, we still own both companies, as we continue to believe they have bright futures ahead with many more shots on goal. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
