Riverwater Partners released its fourth-quarter 2025 investor letter for the Micro Opportunities Strategy. The strategy faced challenges in both the fourth quarter and the full year 2025, failing to match benchmark performance.
Underweight exposure in speculative market areas contributed to underperformance in the second half of the year. Throughout 2025, low-quality stocks with poor fundamentals outperformed the market, while the strategy's focus on high-quality stocks lagged behind broader trends.
Looking ahead to 2026, the strategy will concentrate on micro-cap companies with broader sales and growth trajectories. It believes rallies in low-quality stocks will be short-lived.
The letter highlighted Natural Gas Services Group, Inc. (NYSE:NGS) as a recent addition. Based in the United States, the company provides compression equipment. On January 16, 2026, its stock closed at $33.64 per share, with a one-month return of 2.94% and a 52-week gain of 20.19%. The company's market capitalization stands at $422.818 million.
Regarding Natural Gas Services Group, Riverwater Partners stated: "During the 4th quarter we purchased Natural Gas Services Group, Inc. (NYSE:NGS), an energy services company located in Texas, primarily in the Permian region. NGS rents and maintains natural gas compression units used in oil and gas transportation, production and processing facilities. NGS is a unique energy play because they are largely price and commodity agnostic as their focus is on volumes rather than being reliant on the economics of a given commodity. A large percent of their revenue is under long term contracts. Additionally, NGS is in the process of optimizing their portfolio to large horsepower (greater than 1,000HP) while reducing their exposure to small and medium horsepower, about 25% of current revenue. Importantly, NGS has access to large horsepower compressors which is a vital asset in a very tight market. A larger horsepower fleet will be better utilized and have a better margin profile. We are optimistic about volume growth, the optimization of their portfolio evolution and how this could better allow them to compete with the larger players."