| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Riverwater's Sustainable Value Strategy underperformed in Q2 2026 as small-cap stocks achieved their best first-half performance since 1991, driven almost entirely by speculative excess in AI-exposed names. The Russell 2500 Value Index rose 17% in the quarter, with technology surging 75%, but the shortfall came from disciplined avoidance of SanDisk, a cyclical memory semiconductor that appreciated 720% year-to-date and comprised nearly 5% of the benchmark. The manager refused to own SanDisk as it exceeded their market cap threshold and represents a commodity business with poor through-cycle returns, prioritizing mandate discipline over short-term performance. Loss-makers outperformed profitable companies by over 1200 basis points in the quarter, marking the highest-beta quarter for Russell 2000 in over a decade. Technology holdings led by Veeco Instruments contributed strongly in absolute terms but trailed the benchmark's 75% sector surge. The manager maintains conviction in quality-focused investing, believing the portfolio is well-positioned for eventual normalization of market leadership despite current headwinds from speculative market conditions.
Riverwater maintains disciplined, quality-focused small-cap value investing despite a quarter dominated by speculative excess, refusing to compromise their investment framework to chase cyclical commodity businesses or loss-making high-beta names even as these drove benchmark outperformance reminiscent of late 1999 dot-com exuberance.
The manager maintains a constructive view on small-cap equities supported by improving monetary conditions and attractive relative valuations, though acknowledges the anticipated rotation back toward higher-quality businesses has not yet started. While quality continues to lag in the short term with loss-makers and high-beta stocks dominating, the manager believes quality prevails over the long term and the portfolio is well-positioned for eventual normalization of market leadership. The commitment to disciplined, quality-focused investing remains unchanged despite current headwinds.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 15 2026 | 2026 Q2 | ADEA, CENX, CRL, JKHY, KNX, LEG, LOPE, MEOH, NTCT, PLXS, RRC, STVN, VECO, VMI | AI, Quality, Risk Appetite, semiconductors, small caps, technology, value |
VECO MEOH STVN NTCT KNX |
Riverwater underperformed in Q2 2026 as small-caps posted their best first half since 1991, driven by AI exuberance reminiscent of 1999. The manager maintained discipline by avoiding SanDisk's 720% surge, a cyclical memory stock outside their mandate. Loss-makers outperformed profitables by 1200 basis points. Technology holdings contributed strongly but trailed the benchmark's 75% sector rally. Quality positioning remains intact for eventual market normalization. |
| Apr 15 2026 | 2026 Q1 | CENX, DKS, HAE, JKHY, LEG, PLXS, SFM | AI, Aluminum, fundamentals, Geopolitical, Quality, small caps, value |
LEG SFM MEOH DKS JKHY CENX |
Small-cap value manager underperformed in volatile Q1 2026 due to stock selection, despite positive sector allocation. Added five new positions while maintaining focus on high-quality fundamentals at reasonable valuations. Expects rotation toward quality small-caps in 2026 as markets move away from speculative factors. Positioned for AI buildout and commodity supply disruptions from Middle East conflict. |
| Jan 14 2026 | 2025 Q4 | ADEA, CIEN, CNK, DGX, EXEL, HAE, JLL, LMNR, LOPE, MDU, SNV, TGLS | AI, Banking, Quality, semiconductors, small caps, technology, value |
HAE CIEN LOPE LMNR SNV ADEA CNK MRX |
Quality-focused small-cap value strategy underperformed in challenging 2025 environment favoring speculation over fundamentals. Top performer Ciena benefited from AI infrastructure demand while detractors faced sector-specific headwinds. Manager remains disciplined, expecting 2026 rotation back to quality factors with small-caps outperforming as fundamentals reassert themselves. |
| Jun 30 2025 | 2025 Q2 | CIEN, COOP, ECG, EXEL, GFF, HAE, LMNR, LNTH, LOPE, LPX, MSA, NCMI, PNW, VECO | Construction, healthcare, infrastructure, Safety, small cap, technology, value |
ECG LMNR GFF MSA ECG GFF MSA |
Sustainable Value Strategy underperformed in Q2 2025 as markets favored speculative momentum over quality fundamentals following tariff postponement. Added positions in data center beneficiary Everus Construction and safety equipment provider MSA Safety. Despite quarterly headwinds, year-to-date performance outpaces benchmark. Manager maintains conviction in disciplined value approach targeting profitable companies at significant discounts. |
| Mar 31 2025 | 2025 Q1 | AGM, AM, CG, CIEN, CNX, COOP, IDCC, LMNR, PNFP, RRC, STE | Defensive, Energy Transition, Quality, Regional Banks, small caps, Trade Policy, value |
LMNR COOP PNFP RRC AM |
Riverwater's small-cap value strategy outperformed in Q1 despite broad market declines by focusing on quality companies with strong fundamentals. The manager is positioning defensively with higher cash levels while adding domestically-oriented businesses like regional bank Pinnacle Financial and energy transition plays Range Resources and Antero Midstream to navigate anticipated trade policy headwinds. |
| Dec 31 2024 | 2024 Q4 | ATKR, COOP, CPRI, CRL, CROX, DAR, EVR, EXEL, IDCC, LMNR, MOD, NCMI, TPR, VLO | consumer, energy, financials, healthcare, small caps, technology, value |
COOP DAR NCMI EXEL |
Riverwater's small-cap value strategy outperformed through disciplined stock selection, exiting data center winner Modine at peak valuations while adding resilient cash flow generators. Portfolio positioned for AI infrastructure growth and trade policy shifts, maintaining cautious optimism for Fed soft landing while minimizing China exposure and emphasizing individual security selection over broad market allocation. |
| Jun 30 2024 | 2024 Q2 | AMKR, ATKR, CRL, DOX, EVTC, HDSN, LMNR, LPX, MOD, NYCB, VECO | Agriculture, AI, semiconductors, small caps, sustainability, technology, value |
VECO LMNR |
Small caps face their longest underperformance stretch since 1998-2003 without major economic shocks, signaling potential multi-year bull market ahead. Strategy leverages AI growth through semiconductor equipment suppliers like Veeco Instruments while maintaining concentrated exposure to industrial and technology sectors. Federal Reserve rate policy creates near-term headwinds but fundamental opportunity set remains attractive for patient capital. |
| Apr 15 2024 | 2024 Q1 | ATKR, AZZ, CROX, HDSN, ICFI, IRDM, LECO, LMNR, LPX, MOD, NYCB, PLXS, QCOM, TALO, WAL | AI, Data centers, Electrical, Energy Transition, industrials, Quality, small caps, value | ATKR | Small-cap value positioned for multi-year outperformance after 14 years of large-cap dominance. Portfolio emphasizes quality, profitable companies exposed to AI, data centers, and energy transition themes. Industrial outperformance led by Modine and Atkore. New positions in distressed bank NYCB and specialty materials. Quality factors beginning to outperform amid macro uncertainty. |
| Aug 24 2023 | 2023 Q2 | - | Esg, small caps, Sustainable, value | - | Riverwater's Sustainable Value Strategy earned PSN Top Gun recognition across multiple categories in Q2 2023. The concentrated SMID-cap value strategy combines traditional fundamental analysis with ESG criteria, targeting companies between $250M-$20B market cap. Manager Adam Peck emphasizes risk-adjusted returns with strong downside protection while maintaining the firm's mission of sustainable wealth creation. |
| May 23 2023 | 2023 Q1 | - | Awards, Esg, small caps, value | - | Riverwater's Sustainable Value Strategy earned PSN Top Guns recognition for Q1 2023 performance in multiple categories. The concentrated small-mid cap value strategy combines ESG criteria with traditional value investing, targeting companies between $250 million and $20 billion market cap while maintaining strong downside protection and low market beta. |
| - | 2022 Q1 | ATKR, AZZ, BLDR, CFR, CIEN, CNX, CRL, CROX, DGX, FMC, INFU, LEVI, NWE, PNW, REGI, SIVB, SNEX, SPR, UHAL, VRS | aerospace, energy, Esg, healthcare, inflation, small caps, Utilities, value |
SPR AZZ CROX |
Small Cap Value fund emphasizing ESG criteria slightly underperformed in Q1 amid market volatility from Ukraine invasion and inflation concerns. Manager maintains conviction in Small Cap Value as optimal inflation hedge, adding aerospace exposure via Spirit AeroSystems for travel recovery while trimming winners and increasing utility positions for value opportunity. |
| - | 2021 Q4 | AEM, ATKR, BLDR, CIEN, CMBM, CRL, CTT, EEFT, HASI, INFU, JLL, LEVI, RDHL, REGI, THRM, VRS, ZBRA | Electric Vehicles, Esg, Quality, SMID Cap, sustainability, value |
ATKR VRS RDHL LEVI THRM |
Riverwater's SMID value strategy focuses on quality companies earning their cost of capital while avoiding meme stocks. Top performer Atkore traded at 3x earnings despite strong results. New additions include Levi Strauss for post-pandemic casual trends and Gentherm for EV thermal management solutions. Strategy emphasizes ESG practices and sustainable competitive advantages. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIAI data centers drove enormous demand for NAND flash storage and high bandwidth memory, causing semiconductor equipment suppliers like Veeco to surge. The quarter saw AI-exposed names rally dramatically, reminiscent of late 1999 dot-com exuberance. AI was the key driver for technology sector returns in the first half of 2026. |
Data Centers Semiconductors Memory Technology |
Semiconductor CycleMemory makers raced to add capacity as orders came in well ahead of expectations. SanDisk appreciated 720% year-to-date driven by tight NAND supply conditions. However, the manager views memory semiconductors as cyclical commodity businesses with poor returns on invested capital across the cycle, currently in a tight-supply period that will not last. |
Memory NAND Cyclical Supply | |
QualityLoss-makers significantly outperformed profitable companies by more than 1200 basis points in the quarter, extending a run where they led in four of the past five quarters. The manager maintains commitment to disciplined, quality-focused investing despite short-term underperformance, believing quality prevails over the long term and the portfolio is well-positioned for eventual normalization of market leadership. |
Profitability Discipline Value | |
Risk AppetiteHighest Beta stocks alone outperformed in Q2 2026, marking Beta's best relative quarter within the Russell 2000 in over a decade. The quarter was defined by exuberance in AI-exposed names reminiscent of late 1999 when any company affiliated with dot-com had phenomenal returns. This represents an unusual market environment where speculative, high-beta names dominated performance. |
Beta Speculation Volatility | |
Small CapsSmall-cap stocks achieved their best first-half performance since 1991, with the Russell 2500 Value Index rising 17% in Q2 2026. The manager entered the year with a constructive view on small-cap equities supported by improving monetary conditions, attractive relative valuations, and an anticipated rotation back toward higher-quality businesses, though that rotation has not yet started. |
Russell 2500 Valuations Rotation | |
| 2026 Q1 |
AluminumThe manager provides extensive analysis of Century Aluminum, highlighting the collapse of U.S. primary aluminum production from 33% of global output to under 1%. The Oklahoma mega-project with Emirates Global Aluminium represents a decade-long growth runway that would more than double current U.S. production. LME aluminum prices have risen above $3,300/ton on tightening global supply and geopolitical disruption risks. |
Aluminum Smelters Tariffs Production Supply |
AIThe manager believes the artificial intelligence buildout has a number of innings left. They are exposed predominantly through industrial holdings, but also have exposure in technology and utilities. AI is viewed as a beneficiary for companies like Jack Henry & Associates rather than a threat. |
AI Technology Industrial Automation Disruption | |
Small CapsThe manager is increasingly constructive on small-cap equities broadly and high-quality small-cap businesses in particular. They believe 2026 will mark a rotation back toward fundamentals, with quality small-cap stocks outperforming not only lower-quality peers but also large-cap equities. Small-cap performance in 2025 was driven by lower-quality factors which historically proves unsustainable. |
Small Caps Quality Fundamentals Rotation Outperformance | |
GeopoliticalThe excursion in the Middle East will likely drive markets through the rest of the year. The manager has made adjustments based on how they anticipate supply disruptions playing out. Geopolitical developments including reduced Iranian supply and broader regional instability are contributing to higher commodity pricing. |
Geopolitical Middle East Supply Disruption Iran | |
| 2025 Q4 |
Industrial GasesSOL Group operates dual-engine industrial gas franchise serving 50k customers across 32 countries plus homecare health business. Manager views gases as expensive to transport creating local oligopolies with high barriers to entry through infrastructure networks built over decades. |
Industrial Gases Infrastructure Oligopoly Barriers Distribution |
HomecareVivisol homecare division serves 750k patients across Europe, growing 13% annually driven by aging demographics and healthcare systems moving chronic care from hospitals to homes. Manager sees this as defensive recurring revenue business with high switching costs. |
Homecare Demographics Healthcare Recurring Vivisol | |
AIManager maintains cautious stance on AI impact, preferring businesses unlikely to see unit economics negatively affected by AI. Appetite has grown for high barriers to entry and exceptionally resilient business models since AI boom. |
AI Disruption Resilience Barriers Software | |
| 2025 Q2 |
Data CentersECG benefits from exponential power demand from AI and data centers, exemplifying Jevons Paradox where efficiency gains are overwhelmed by usage growth. The company's backlog has grown over 40% driven primarily by data center and high-tech infrastructure projects. |
AI Infrastructure Power Backlog Growth |
Grid UpgradeECG is positioned to benefit from grid modernization needs as aging utility infrastructure graded D+ by industry assessments requires substantial investment. The company focuses on transmission and distribution markets addressing these infrastructure needs. |
Transmission Distribution Infrastructure Modernization Utilities | |
Energy TransitionMSA Safety is positioned to benefit as the world navigates energy transition and electrification, with safety remaining paramount for executives. The company manufactures safety equipment for hazardous environments across oil & gas, construction, mining, and military applications. |
Safety Electrification Equipment Industrial Transition | |
| 2025 Q1 |
Energy TransitionThe manager increased exposure to energy transition by adding Range Resources and Antero Midstream Corp. Both companies play critical roles in energy and electrification, with electrification expected to see significant demand growth in coming years and decades. Range is a low-cost natural gas producer while Antero specializes in transporting, gathering and processing natural gas. |
Natural Gas Electrification Energy Infrastructure Midstream Utilities |
Trade PolicyThe manager anticipates substantial headwinds to global trade and references the protectionist Smoot-Hawley Tariff Act from the 1930s as historical precedent. They remain skeptical that broad global tariffs will achieve their intended objectives and are focusing on domestically-oriented companies to balance cyclicality and tariff impacts. |
Tariffs Protectionism Domestic Global Trade Policy | |
Regional BanksThe strategy added Pinnacle Financial Partners, a high-performing regional bank with a relationship-centric business model focused on commercial and affluent clients across the Southeast. The bank differentiates through talent-first strategy and maintains strong asset quality with conservative loan-to-value ratios. |
Banking Southeast Commercial Lending Asset Quality Financial Services | |
| 2024 Q4 |
Data CentersStrong growth in data centers drove significant outperformance in Modine Manufacturing. Most forecasts predict a doubling of data center demand by 2030, with the manager noting this trend shows no signs of slowing. |
Data Centers Infrastructure Cooling |
AIArtificial intelligence growth is expected to persist and provide opportunities. The manager focuses on picks and shovels investments like semiconductor equipment providers and companies enabling data transmission. Utility investments are driven by projected doubling of electricity demand over five years to support AI growth. |
AI Semiconductors Electricity Infrastructure Growth | |
Trade PolicyThe manager expects potential economic shocks in sectors sensitive to evolving tariff discussions with Canada and Mexico. They are exploring opportunities in industries poised to benefit from U.S.-China trade tensions while minimizing exposure to China in supplier and customer relationships. |
Tariffs Trade China Geopolitics | |
OncologyExelixis is a commercial-stage oncology company with blockbuster asset Cabozantinib generating approximately $2B in global revenues. The company focuses on driving innovation to improve standard of care for patients rather than pursuing me-too programs. |
Cancer Pharmaceuticals Innovation FDA | |
| 2024 Q2 |
AIThe manager sees tremendous opportunity for companies to use AI to improve productivity and growth, though most management teams are unprepared to implement it effectively. Three of their best performers provide picks and shovels to make AI happen: Amkor Technologies, Modine Manufacturing, and Veeco Instruments. |
Semiconductors Data Centers Equipment Productivity Technology |
Small CapsThe Russell 2000's stagnation since early 2021 marks the longest stretch of negative returns since 1998-2003, but unlike that period, the current stagnation occurred without a major economic shock. The manager believes small caps' relative underperformance is nearing its end with potential for a multi-year bull market to follow. |
Russell 2000 Underperformance Valuation Opportunity Outperformance | |
SemiconductorsThe strategy has exposure to semiconductor equipment companies like Veeco Instruments that provide essential equipment for AI chip production. The insatiable need for data storage and retrieval by AI servers has significantly increased demand for memory and storage, benefiting semiconductor equipment suppliers. |
Equipment Memory Storage Manufacturing Technology | |
AgricultureLimoneira represents a deep dive opportunity in agriculture with 15% market share in the US lemon industry and significant undervalued land and water rights. The company is pivoting towards avocado production, a more profitable segment with growing US demand at 4.4% CAGR over the past ten years. |
Land Water Rights Avocados Sustainability Real Estate | |
| 2024 Q1 |
Small CapsSmall-caps continued what appears to be a new bull market since hitting bottom last October. Small-caps still have significant ground to cover, having last peaked in 2021, while large-caps have continued to hit record highs. The manager believes they're in the 9th inning of large-cap outperformance and the next five and ten-year outlook for small versus large appears highly enticing. |
Small Caps Value Russell 2500 Outperformance Cycle |
AIThe recent market leaders' performance is fueled by the remarkable growth of artificial intelligence. Many small-caps have exposure to AI, and the portfolio has benefited. The growing energy consumption of data centers due to advancements in Artificial Intelligence are bolstering prospects for portfolio companies like ATKR. |
AI Data Centers Growth Technology Infrastructure | |
Data CentersA significant aspect of the thesis on Modine revolves around data center growth, which shows no signs of slowing down. Most forecasts predict a doubling of data center demand by 2030 at the slowest pace, or as early as 2026 at the fastest. The growing energy consumption of data centers due to AI advancements are bolstering ATKR's prospects. |
Data Centers Infrastructure Growth Electrical AI | |
Energy TransitionATKR is well-positioned as we transition towards a future where electricity takes center stage. Operating in thematic markets experiencing secular growth, ATKR is positioned in key sectors such as the solar industry and EV batteries where they play a crucial role as a supplier of electrical components. Sustained demand for solar products should continue, driven partly by policy initiatives like bringing manufacturing back to the US from China. |
Energy Transition Solar Electric Vehicles Electrical Infrastructure | |
QualityTo mitigate macro concerns, the manager focuses on investing in quality businesses led by management teams capable of adapting to the constantly evolving environment. Over 99% of portfolio companies are profitable and they pay close attention to their use of debt. Given the macro concerns, it's not surprising that quality factors like return on capital have begun to outperform and they believe that outperformance will continue. |
Quality Profitability Return on Capital Management Debt | |
| 2022 Q1 |
Small CapsManager emphasizes Small Cap Value as the best performing asset class during inflationary periods, outperforming inflation over 95% of rolling 10-year periods since 1932. Value stocks outperformed growth in Q1 with Russell 2500 Value declining only 1.5% versus 12.3% for growth. |
Value Inflation Russell |
EnergyEnergy was a positive contributor despite difficulty finding ESG-compliant names. REGI was acquired by Chevron at $61.50, and CNX Resources benefited from higher natural gas prices due to the Russian invasion. Manager replaced REGI with another energy company for future discussion. |
Natural Gas Renewable Ukraine | |
HomebuildersDespite mortgage rate concerns affecting BLDR, manager remains bullish on homebuilding due to a decade-plus deficit of homes in the US from underinvestment in new housing construction. |
Housing Mortgage Construction | |
AerospaceAdded Spirit AeroSystems which designs and manufactures commercial aerostructures. After three tough years from 737 Max issues and pandemic, SPR is positioned to benefit from increased production reaching 41 planes monthly as travel recovers. |
Boeing Travel Manufacturing | |
| 2021 Q4 |
Electric VehiclesGentherm provides thermal management solutions for automobiles with 65% market share in heated/cooled seats. Their Battery Performance Solutions and Climate Control Solutions for EVs can cut battery use over 50% in cold weather, significantly extending range. As auto manufacturers transition to EVs, Gentherm is positioned to enhance their products. |
Electric Vehicles Battery Thermal Management Auto Parts Energy Efficiency |
ESGThe strategy focuses on ESG practices with holdings like Hannon Armstrong, described as a top tier REIT that excels in ESG practices. Levi Strauss is highlighted as a leader in sustainability with targets for all owned facilities to run on renewable electricity by 2025. |
ESG Sustainability Renewable Energy Corporate Responsibility | |
ValueThe strategy focuses on quality companies that earn their cost of capital, avoiding unprofitable meme stocks. Atkore was priced at only 3x earnings and still trades at below market multiples. Levi Strauss trades at below market multiples with very high returns on capital. |
Value Quality Earnings Returns Multiples |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 15, 2026 | Fund Letters | Riverwater Sustainable Value Strategy | VECO | Veeco Instruments Inc. | Semiconductor Equipment & Materials | Semiconductor Equipment | Bull | NASDAQ | AI infrastructure, data centers, High-Bandwidth Memory, Ion Beam Deposition, Laser Annealing, Memory Manufacturing, semiconductor equipment, technology | Login |
| Jul 15, 2026 | Fund Letters | Riverwater Sustainable Value Strategy | MEOH | Methanex Corporation | Chemicals | Commodity Chemicals | Neutral | NASDAQ | Commodity chemicals, Cyclical, Free Cash Flow, geopolitical risk, Methanol Producer, natural gas, Trinidad and Tobago, Value | Login |
| Jul 15, 2026 | Fund Letters | Riverwater Sustainable Value Strategy | STVN | Stevanato Group | Medical Instruments & Supplies | Health Care Equipment | Bull | New York Stock Exchange | biologics, Drug Containment, family-controlled, GLP-1, Health Care Equipment, high switching costs, Italy, pharmaceuticals, Prefilled Syringes, Value | Login |
| Jul 15, 2026 | Fund Letters | Riverwater Sustainable Value Strategy | NTCT | NetScout Systems | Software - Infrastructure | Systems Software | Bull | NASDAQ | 5G, AI threats, cloud migration, cybersecurity, DDoS Protection, Deep Packet Inspection, Network Performance, Software, Systems Software, Value | Login |
| Jul 15, 2026 | Fund Letters | Riverwater Sustainable Value Strategy | KNX | Knight-Swift Transportation Holdings Inc. | Trucking | Trucking | Bull | New York Stock Exchange | Cyclical, freight transportation, Logistics, Market Share Gain, Regulatory Tailwind, Safety Record, Trucking, turnaround, Value | Login |
| Apr 15, 2026 | Fund Letters | Riverwater Sustainable Value Strategy | LEG | Leggett & Platt, Inc. | Furnishings, Fixtures & Appliances | Home Furnishings | Bull | New York Stock Exchange | automotive, Bedding Components, Cyclical Recovery, Free Cash Flow, furniture, Manufacturer, market leadership, restructuring, takeover target, Value | Login |
| Apr 15, 2026 | Fund Letters | Riverwater Sustainable Value Strategy | SFM | Sprouts Farmers Market, Inc. | Grocery Stores | Food & Staples Retailing | Bull | NASDAQ | Customer loyalty, gross margins, growth, health-focused, Natural Foods, Organic, Private-label, Specialty Grocery, Store growth, supply chain | Login |
| Apr 15, 2026 | Fund Letters | Riverwater Sustainable Value Strategy | MEOH | Methanex Corporation | Chemicals | Commodity Chemicals | Bull | NASDAQ | Commodity chemicals, Decarbonization, ESG, geopolitical, Global Production, Logistics Network, Methanol, Middle East, Pricing power, Supply Disruption | Login |
| Apr 15, 2026 | Fund Letters | Riverwater Sustainable Value Strategy | DKS | Dick's Sporting Goods, Inc. | Specialty Retail | Specialty Retail | Bull | New York Stock Exchange | Athletic Retail, Cyclical, FIFA World Cup, Foot Locker, market share, merchandising, Nike, Premium Experience, Sporting goods, Youth sports | Login |
| Apr 15, 2026 | Fund Letters | Riverwater Sustainable Value Strategy | JKHY | Jack Henry & Associates, Inc. | Information Technology Services | IT Services | Bull | NASDAQ | AI Beneficiary, banking technology, Core Processing, Fintech, High retention, market share, recurring revenue, Regulatory, Small Banks, switching costs | Login |
| Apr 15, 2026 | Fund Letters | Riverwater Sustainable Value Strategy | CENX | Century Aluminum Company | Aluminum | Aluminum | Bull | NASDAQ | Aluminum, capacity expansion, geopolitical, Oklahoma Project, operating leverage, Primary Production, Reindustrialization, renewable energy, Reshoring, tariffs | Login |
| Jan 14, 2026 | Fund Letters | Adam Peck | HAE | Haemonetics Corporation | Health Care | Health Care Equipment | Bull | New York Stock Exchange | growth, Hospitals, Medicaldevices, Plasma, recovery | Login |
| Jan 14, 2026 | Fund Letters | Adam Peck | CIEN | Ciena Corporation | Information Technology | Communications Equipment | Bull | New York Stock Exchange | AI, backlog, datacenters, Networking, Optical | Login |
| Jan 14, 2026 | Fund Letters | Adam Peck | LOPE | Grand Canyon Education, Inc. | Consumer Discretionary | Education Services | Bull | NASDAQ | compounder, Education, Enrollment, Regulation, ROIC | Login |
| Jan 14, 2026 | Fund Letters | Adam Peck | LMNR | Limoneira Company | Consumer Staples | Agricultural Products | Bull | NASDAQ | agriculture, Assetvalue, land, restructuring, Water | Login |
| Jan 14, 2026 | Fund Letters | Adam Peck | SNV | Synovus Financial Corp. | Financials | Regional Banks | Bull | New York Stock Exchange | Accretion, banking, merger, rerating, valuation | Login |
| Jan 14, 2026 | Fund Letters | Adam Peck | ADEA | Adeia Inc. | Information Technology | Semiconductor IP | Bull | NASDAQ | Hybridbonding, Ip, Licensing, royalties, semiconductors | Login |
| Jan 14, 2026 | Fund Letters | Adam Peck | CNK | Cinemark Holdings, Inc. | Communication Services | Movies & Entertainment | Bear | New York Stock Exchange | Boxoffice, disruption, Risk, Streaming, Theaters | Login |
| Jan 14, 2026 | Fund Letters | Adam Peck | MRX | Marex Group PLC | Financials | Capital Markets | Bear | New York Stock Exchange | Capitalmarkets, Sentiment, Shortinterest, valuation, Volatility | Login |
| Jun 30, 2025 | Fund Letters | Adam Peck | ECG | Everus Construction Group Inc. | Industrials | Construction & Engineering | Bull | New York Stock Exchange | backlog, construction, datacenters, infrastructure, tariffs | Login |
| Jun 30, 2025 | Fund Letters | Adam Peck | LMNR | Limoneira Company | Consumer Staples | Food Products | Bull | NASDAQ | Agribusiness, Citrus, Farmland, realestate, Water | Login |
| Jun 30, 2025 | Fund Letters | Adam Peck | GFF | Griffon Corporation | Industrials | Building Products | Bull | New York Stock Exchange | brands, Building, Doors, Homecenter, Margins | Login |
| Jun 30, 2025 | Fund Letters | Adam Peck | MSA | MSA Safety Incorporated | Industrials | Industrial Machinery | Bull | New York Stock Exchange | Detection, Fire, Industrial, PPE, Safety | Login |
| Jun 30, 2025 | Fund Letters | Riverwater Sustainable Value Strategy | ECG | Everus Construction Group | Industrials | Construction & Engineering | Bull | NASDAQ | AI infrastructure, construction, data centers, discount, Distribution, Electrical, engineering, Grid modernization, spinoff, Transmission, Utility Infrastructure, Value | Login |
| Jun 30, 2025 | Fund Letters | Riverwater Sustainable Value Strategy | GFF | Griffon Corporation | Industrials | Building Products | Bull | NYSE | Building Products, Commercial Doors, Consumer products, discount, Garage Doors, innovation, market share, operating margins, Portfolio Streamlining, Value | Login |
| Jun 30, 2025 | Fund Letters | Riverwater Sustainable Value Strategy | MSA | MSA Safety | Industrials | Industrial Machinery | Bull | NYSE | construction, discount, Electrification, energy transition, Hazardous Environments, High quality, Military, Mining, Oil & Gas, Safety Equipment, Value | Login |
| Mar 31, 2025 | Fund Letters | Riverwater Sustainable Value Strategy | LMNR | Limoneira Company | Consumer Staples | Agricultural Products | Bull | NASDAQ | Agricultural Products, asset monetization, Avocados, Citrus, land development, Real Estate, Water Rights | Login |
| Mar 31, 2025 | Fund Letters | Riverwater Sustainable Value Strategy | COOP | Mr. Cooper Group Inc | Financials | Thrifts & Mortgage Finance | Bull | NASDAQ | Corporate action, financial services, merger, Mortgage servicing, real estate finance | Login |
| Mar 31, 2025 | Fund Letters | Riverwater Sustainable Value Strategy | PNFP | Pinnacle Financial Partners Inc | Financials | Regional Banks | Bull | NASDAQ | asset quality, Commercial Banking, fee income, regional banks, SBA Loans, Southeast, Talent Strategy | Login |
| Mar 31, 2025 | Fund Letters | Riverwater Sustainable Value Strategy | RRC | Range Resources Corporation | Energy | Oil, Gas & Consumable Fuels | Bull | NYSE | debt management, Electrification, energy transition, ESG, Free Cash Flow, Low-cost producer, natural gas | Login |
| Mar 31, 2025 | Fund Letters | Riverwater Sustainable Value Strategy | AM | Antero Midstream Corporation | Energy | Oil, Gas & Consumable Fuels | Bull | NYSE | dividend yield, energy transition, Fee Based, midstream, Natural Gas Infrastructure, Toll Road Model, Water Handling | Login |
| Dec 31, 2024 | Fund Letters | Riverwater Sustainable Value Strategy | COOP | Mr. Cooper Group Inc. | Financials | Thrifts & Mortgage Finance | Bull | NASDAQ | financials, Interest rates, Mortgage Servicer, Non-bank, ROE, scale, Value | Login |
| Dec 31, 2024 | Fund Letters | Riverwater Sustainable Value Strategy | DAR | Darling Ingredients Inc. | Materials | Specialty Chemicals | Bull | NYSE | Biofuels, Circular economy, ESG, Joint venture, renewable energy, Sustainable Ingredients, Value | Login |
| Dec 31, 2024 | Fund Letters | Riverwater Sustainable Value Strategy | NCMI | National CineMedia, Inc. | Communication Services | Advertising | Bull | NASDAQ | Advertising Network, competitive moat, entertainment, Free Cash Flow, Post-Pandemic Recovery, Theater Advertising | Login |
| Dec 31, 2024 | Fund Letters | Riverwater Sustainable Value Strategy | EXEL | Exelixis, Inc. | Health Care | Biotechnology | Bull | NASDAQ | biotechnology, blockbuster drug, healthcare, Oncology, pipeline, Standard of Care, Value | Login |
| Jun 30, 2024 | Fund Letters | Riverwater Sustainable Value Strategy | VECO | Veeco Instruments Inc | Information Technology | Semiconductor Equipment | Bull | NASDAQ | AI infrastructure, Cyclical, Laser Annealing, Memory, Process Equipment, semiconductor equipment, Storage, technology | Login |
| Jun 30, 2024 | Fund Letters | Riverwater Sustainable Value Strategy | LMNR | Limoneira | Consumer Staples | Agricultural Products | Bull | NASDAQ | Agricultural Products, Asset Play, Avocados, Land Rights, Lemons, real estate development, strategic review, Sustainability, Value, Water Rights | Login |
| Mar 31, 2024 | Fund Letters | Riverwater Sustainable Value Strategy | ATKR | Atkore Inc | Industrials | Electrical Equipment | Bull | NYSE | Artificial Intelligence, data centers, dividend, electrical equipment, Electrification, ESG, Ev infrastructure, infrastructure, manufacturing, secular growth, Solar | Login |
| - | Fund Letters | Riverwater Sustainable Value Strategy | ATKR | Atkore Inc. | Electrical Equipment & Parts | Electrical Components & Equipment | Bull | New York Stock Exchange | Below-Market Multiple, Capital Goods, earnings growth, electrical equipment, manufacturing, Value | Login |
| - | Fund Letters | Riverwater Sustainable Value Strategy | VRS | Verso Corp | Other | Paper Products | Bull | New York Stock Exchange | acquisition target, Cyclical Recovery, M&A, materials, Paper Products, Value | Login |
| - | Fund Letters | Riverwater Sustainable Value Strategy | RDHL | Redhill Biopharma | Drug Manufacturers - Specialty & Generic | Biotechnology | Bear | NASDAQ | biotechnology, capital allocation, COVID Treatment, Dilution, Failed Trial, GI Therapeutics | Login |
| - | Fund Letters | Riverwater Sustainable Value Strategy | LEVI | Levi Strauss & Co. | Apparel Manufacturing | Apparel, Accessories & Luxury Goods | Bull | New York Stock Exchange | Apparel, Below-Market Multiple, Casual Wear, Denim, ESG, high-ROIC, Sustainability | Login |
| - | Fund Letters | Riverwater Sustainable Value Strategy | THRM | Gentherm Inc. | Auto Parts | Auto Parts & Equipment | Bull | NASDAQ | Auto parts, battery technology, Electric Vehicles, Ev-Transition, growth, market share, thermal management | Login |
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| - | Fund Letters | Riverwater Sustainable Value Strategy | CROX | Crocs | Footwear & Accessories | Textiles, Apparel & Luxury Goods | Bull | NASDAQ | acquisition, Brand Diversification, Casual Wear, Consumer Discretionary, double-digit growth, ESG, Footwear, Hey Dude, Net Zero, Value | Login |
| TICKER | COMMENTARY |
|---|---|
| VECO | Veeco Instruments (VECO) was our largest contributor for the quarter. As a supplier of laser annealing and ion beam deposition equipment, the company is integral to manufacturing advanced semiconductors, including the high bandwidth memory essential for AI data centers. Orders and results came in well ahead of expectations as memory makers raced to add capacity, causing the stock to more than double in three months. Consistent with our discipline, we trimmed the position repeatedly throughout the quarter as the position size grew. Veeco remains a holding at an appropriate, defensible, weight. |
| MEOH | Methanex (MEOH) was the largest detractor during the quarter. Methanex sold off late in the quarter because the Iran/Hormuz-linked risk premium that drove methanol's spring rally unwound once the ceasefire took hold. We believed the Middle East conflict would disrupt natural gas feedstock and shipping through the Strait of Hormuz for an extended period. Once the peace agreement removed that geopolitical premium, methanol prices gave back much of the gain. The decline was compounded by an idiosyncratic operational setback: Methanex announced the indefinite idling of its 860,000-tonne Titan methanol plant in Trinidad and Tobago, following the inability to secure a new natural gas contract ahead of the current agreement's expiration in the third quarter of 2026. However, this was not included in EBITDA estimates for the year. While we initiated a partial position and continue to evaluate its long-term merit, we remain attracted to its strong free cash flow margin and double-digit free cash flow yield. Despite expectations for cash flow to decline in 2027 versus 2026, we still think the company is undervalued based on normalized methanol pricing. |
| STVN | Founded in 1949 and headquartered in Piombino Dese, Italy, Stevanato is a leading global provider of drug containment and delivery solutions (think glass vials and syringes) to the pharmaceutical, biotechnology, and life sciences industries. The company remains family controlled, with Franco Stevanato serving as CEO and Board Chair and the family owning 78% of the stock, aligning its interests with ours. After monitoring the company for several years, our recent discussions with management reinforced our confidence in the franchise's durability. Stevanato has evolved from a regional glass manufacturer into a vertically integrated, mission critical supplier serving customers in more than 70 countries. Regulatory qualification of its manufacturing processes creates significant switching costs. STVN made a strategic shift to focus its new capacity on High-Value Solutions (HVS), which include premium products such as Nexa® high-performance prefilled syringes and EZ-fill® vials and cartridges designed for biologics and sensitive drug formulations. These intentional moves have enabled an inflection in revenue growth, margin expansion, and free cash flow generation. The stock sold off after the launch of oral GLP-1 drugs, which some believe will end the need for injectable formats. We disagree and believe that an expanding GLP-1 market with varied use cases should sustain injectable demand. Indeed, 25% of drugs approved in 2025 were biologics which will require injectable devices. The overreaction gave us an opportunity to buy at 12.5x expected fiscal 2026 EBITDA versus the company's historic 20x and its closest comparable, West Pharmaceutical (WST), at 22x to 25x. |
| NTCT | NetScout provides service assurance and cybersecurity solutions built on its pioneering deep packet inspection technology, used by many Fortune 500 companies to protect digital business services against disruption. Its patented Adaptive Service Intelligence platform helps customers find and resolve network performance issues and defend against denial of service attacks, which botnet operators now launch by the hundreds of thousands weekly against governments, NGOs, and enterprises. As a result, customers can quickly resolve issues that cause business disruptions, downtime, poor service quality or compromised security, thereby driving compelling returns on their investments in their network and broader information technology (IT) initiatives. The rise of AI driven threats, cloud migration, and 5G buildouts all expand NetScout's opportunity. We paid roughly 2x revenue to enterprise value and 13x earnings, which we view as an attractive entry point for a software business that we believe is poised for better growth. |
| KNX | We added Knight Swift last quarter on the strength of two structural catalysts converging with a cyclical trough. The Montgomery v. Caribe Transport Supreme Court ruling in May established broker liability for negligent carrier selection, and permanently raised the bar for shippers and brokers using marginal, non-vetted carriers, favoring scale players like Knight-Swift with clean safety records over small fleets that have driven overcapacity. This structural tailwind landed on top of a freight cycle that has been in a rate/volume trough for roughly three years, with truckload spot and contract rates depressed since the post-pandemic capacity glut. The combination gave us a cyclical trough entry point (buying depressed through-cycle earnings power) layered with a durable, tort-driven demand shift toward larger carriers. |
| CRL | We sold Charles River Laboratories to fund our buy of Stevanato Group. While the company is making progress on portfolio optimization, we remain cautious about the long term impact of the FDA's New Approach Methodologies on the company's animal testing business in preclinical drug discovery. |
| LEG | We exited Leggett & Platt following the announcement of its acquisition by Somnigroup International in a stock-for-stock deal. Once the deal was announced, LEG traded as a merger-arb spread against SGI stock rather than on its own fundamentals. Continuing to hold it stopped being an investment on the underlying bedding-components business, our management thesis, or valuation discipline and became a bet on deal spread and closing risk, which we decided to not take. |
| PLXS | Plexus Corp. was the second largest contributor for the quarter with 4.00% average weight contributing 1.61% to returns. |
| ADEA | Adeia Inc. was among the top contributors for the quarter with 3.84% average weight contributing 1.26% to returns. |
| VMI | Valmont Industries, Inc. was among the top contributors for the quarter with 2.83% average weight contributing 1.07% to returns. |
| RRC | Range Resources Corporation was among the largest detractors for the quarter with 2.79% average weight contributing -0.59% to returns. |
| LOPE | Grand Canyon Education, Inc. was among the largest detractors for the quarter with 3.22% average weight contributing -0.55% to returns. |
| CENX | Century Aluminum Company was among the largest detractors for the quarter with 2.06% average weight contributing -0.48% to returns. |
| JKHY | Jack Henry & Associates, Inc. was among the largest detractors for the quarter with 2.41% average weight contributing -0.37% to returns. |
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