Overview
- Riverwater reported its Q1 2026 letter showed gains ahead of the Russell 2000 and said it targeted dislocations caused by geopolitical tension, AI skepticism, and stress in private credit.
- Modine Manufacturing was a top contributor as data-center cooling demand grew and its auto cooling spinoff with Gentherm drew praise, which the firm said lifted shares more than 60% in the quarter.
- Coastal Financial was the biggest laggard as investors questioned risks tied to its fintech partners and tighter credit, and Riverwater cut the position but kept a smaller stake.
- The team exited Canada Goose after higher-than-planned selling and marketing costs and an Iran-linked energy price spike dampened consumer sentiment, and it sold Tennant following an ERP breakdown that paused orders for three weeks.
- Riverwater added Cushman & Wakefield, arguing AI fears pushed the stock well below peers, and it stuck with AtriCure after Edwards Lifesciences announced a rival heart device that weighed on the shares without changing near-term fundamentals.