Riverwater Partners, an investment management company, released its 'Small Cap Strategy' Q2 2026 investor letter. The letter can be downloaded here. The Small Cap Strategy underperformed the Russell 2000 in the second quarter as the benchmark experienced one of its strongest risk-on rallies in recent memory, although the strategy remained ahead year-to-date. The quarter was defined by accelerating AI investment, energy market disruptions, and renewed investor appetite for higher-beta stocks, creating headwinds for the firm's quality-focused approach and healthcare positioning. Despite this, stock selection contributed positively in energy, materials, and financials, while healthcare and consumer discretionary detracted due to the fund's disciplined avoidance of speculative businesses. Looking ahead, the firm remains cautiously optimistic, focusing on opportunities created by market dislocations, including AI infrastructure enablers, select consumer companies, healthcare innovators, and energy businesses trading below intrinsic value. The strategy continues to emphasize high-quality companies with strong management teams and attractive valuations, positioning the portfolio for a potential rotation away from speculative market leadership. In addition, please check the Strategy's top five holdings to know its best picks in 2026.
In its second-quarter 2026 investor letter, Riverwater Partners Small Cap Strategy highlighted Werner Enterprises, Inc. (NASDAQ:WERN). The Fund added Werner Enterprises, Inc. (NASDAQ:WERN) which engages in transporting truckload shipments of general commodities in interstate and intrastate commerce, to its portfolio during the quarter. On August 31, 2026, Werner Enterprises, Inc. (NASDAQ:WERN) closed at $39.18 per share. The one-month return of Werner Enterprises, Inc. (NASDAQ:WERN) was 2.27% and its shares gained 37.43% over the past 52 weeks. Werner Enterprises, Inc. (NASDAQ:WERN) has a market capitalization of $2.35 billion with a 52-week trading range between $23.06 to $47.49.
Riverwater Partners Small Cap Strategy stated the following regarding Werner Enterprises, Inc. (NASDAQ:WERN) in its Q2 2026 investor letter:
"Late in the quarter we initiated Werner Enterprises, Inc. (NASDAQ:WERN), one of the largest truckload carriers. A landmark liability ruling now places responsibility for driver safety squarely on carriers with the balance sheets to insure it, a change we believe will force as much as a third of industry capacity, concentrated among small and marginal operators, to consolidate or exit. Large, well-capitalized carriers such as Werner should be the direct beneficiaries through pricing power and share gains. Only two of fifteen covering ******* ysts rated the stock a buy when we purchased it, which is precisely the setup we look for: identifying the inflection before the upgrade cycle begins."
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In its second-quarter 2026 investor letter, Riverwater Partners Small Cap Strategy highlighted Werner Enterprises, Inc. (NASDAQ:WERN). The Fund added Werner Enterprises, Inc. (NASDAQ:WERN) which engages in transporting truckload shipments of general commodities in interstate and intrastate commerce, to its portfolio during the quarter. On August 31, 2026, Werner Enterprises, Inc. (NASDAQ:WERN) closed at $39.18 per share. The one-month return of Werner Enterprises, Inc. (NASDAQ:WERN) was 2.27% and its shares gained 37.43% over the past 52 weeks. Werner Enterprises, Inc. (NASDAQ:WERN) has a market capitalization of $2.35 billion with a 52-week trading range between $23.06 to $47.49.
Riverwater Partners Small Cap Strategy stated the following regarding Werner Enterprises, Inc. (NASDAQ:WERN) in its Q2 2026 investor letter:
"Late in the quarter we initiated Werner Enterprises, Inc. (NASDAQ:WERN), one of the largest truckload carriers. A landmark liability ruling now places responsibility for driver safety squarely on carriers with the balance sheets to insure it, a change we believe will force as much as a third of industry capacity, concentrated among small and marginal operators, to consolidate or exit. Large, well-capitalized carriers such as Werner should be the direct beneficiaries through pricing power and share gains. Only two of fifteen covering ******* ysts rated the stock a buy when we purchased it, which is precisely the setup we look for: identifying the inflection before the upgrade cycle begins."
#partners
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