Riverwater Partners, an investment management company, recently released its Q4 2025 investor letter detailing its “Micro Opportunities Strategy.” The strategy faced challenges in both Q4 and the full year of 2025, struggling to match benchmark performance due to underweight exposure in speculative areas of the market. This led to underperformance in the second half of the year, as low-quality stocks with poor fundamentals outperformed the market, while the strategy’s emphasis on high-quality stocks lagged behind broader market trends.
Looking ahead to 2026, the Strategy is focusing on micro-cap companies with broader sales and growth trajectories, believing that the recent rallies in low-quality stocks will be short-lived. Investors can download a copy of the investor letter to explore the fund’s top five holdings and determine its best picks for 2025.
In the investor letter, Riverwater Partners Micro Opportunities Strategy highlighted Natural Gas Services Group, Inc. (NYSE:NGS) as a recent addition to its portfolio. Natural Gas Services Group, Inc. is a US-based compression equipment provider, with its stock closing at $33.64 per share on January 16, 2026. The stock has shown a one-month return of 2.94% and gained 20.19% of its value over the last 52 weeks, with a market capitalization of $422.818 million.
The investor letter provided insights into the rationale behind adding Natural Gas Services Group, Inc. to the portfolio, highlighting the company’s focus on natural gas compression units used in oil and gas transportation, production, and processing facilities. The company’s unique positioning as price and commodity agnostic, along with a significant portion of revenue under long-term contracts, makes it an attractive energy play. Natural Gas Services Group, Inc. is optimizing its portfolio to focus on large horsepower compressors, which are crucial assets in a tight market, enhancing volume growth and margin profiles.
While Natural Gas Services Group, Inc. is not among the 30 Most Popular Stocks Among Hedge Funds, the investor letter recognizes its potential as an investment. However, the letter also suggests exploring AI stocks for greater upside potential with lower downside risk. Investors interested in undervalued AI stocks can access a free report on the best short-term AI stock for potential opportunities.
In a related article, Natural Gas Services Group, Inc. was covered alongside a list of energy stocks that declined in the third week of January. Investors are encouraged to explore more hedge fund investor letters from Q4 2025 for additional insights from leading investors.
For more investment opportunities, readers can delve into articles on The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. The article concludes with a disclosure of no affiliations and directs readers to the original publication on Insider Monkey for further information.
