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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Merion Road returned 16.6% in Q2, up 20% YTD, driven by long-term industrial holdings. The manager is adding to Honeywell Aerospace post-spinoff at a peer discount with low expectations set by conservative guidance."
The Merion Road Small Cap Fund returned 16.6% in Q2 2026, bringing YTD performance to 20.1%. The manager continues to focus on boring industrial companies with dominant market positions and attractive free cash flow multiples, explicitly avoiding AI infrastructure despite its recent popularity. The quarter featured broad-based gains from long-term holdings including Bel Fuse, Butler National, and Monarch Cement. Frequency Electronics performed well after announcing backlog exceeding $100mm and strong three-year guidance. The manager is actively adding to Honeywell Aerospace following its separation from Honeywell, viewing conservative management guidance and uninspiring sell-side initiation reports as setting a low bar for future performance. The stock trades at a valuation discount to peers. The manager also released a joint open letter to United Bancorporation of Alabama's Board addressing concerns about capital allocation and expense growth, escalating an activism campaign that has gained media attention. The Long Only portfolio returned 3.9% for the quarter but remains essentially flat year-to-date.
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