MICRO CAP TRADE COMMENTARY
In this quarter’s systematic rebalance, we are adding three new positions where we see stronger paths to earnings growth and stock rerating. We are also increasing our exposure to Enviri Corporation after its recent separation, as the new company still appears undervalued despite strong recent gains. To fund these moves, we are selling three positions where the path to value has become less clear. In this piece we…
- Introduce our new position in Barnes & Noble Education (BNED), where the company is shifting from a declining campus bookstore model toward a recurring, technology-enabled course materials platform through First Day Complete.
- Introduce our new positions in Covenant Logistics (CVLG) and Heartland Express (HTLD), which we believe are well positioned to benefit from a trucking industry recovery driven by forced capacity exits, tighter regulation, and broker preference for safer carriers.
- Provide rationale for adding to our position in Enviri Corporation (NVRI) after the Clean Earth sale and Harsco Environmental / Harsco Rail spin, as we believe the new NVRI can still rerate if management executes its strategy.
- Explain our decision to sell Five Point Holdings (FPH), as higher rates and weaker homebuilder absorption have delayed the company’s ability to monetize its valuable California land assets.
- Detail our decision to sell Nu Skin (NUS), where revenue pressure, weaker unit economics, and an unproven strategic transition create too much execution risk.
- Explain our decision to sell Excelerate Energy (EE), as the company’s core LNG infrastructure model remains attractive, but its Iraq project has become a less visible and higher-risk growth driver.
SELECT NOTES ON NEW BUYS & SELLS:
Barnes & Noble Education (BNED) is the largest campus retail and course materials provider in the U.S., operating bookstores across roughly 700 college and university campuses. An improved business model and its emerging impact on BNED’s earnings power and growth rates were important factors in our decision to add BNED.
L2 Micro Cap Trade Commentary – May Q2 2026
Table of contents
When
May 21, 2026
Who
Matthew Malgari
Dr. Sanjeev Bhojraj
Nathan Przybylo
MICRO CAP TRADE COMMENTARY
In this quarter’s systematic rebalance, we are adding three new positions where we see stronger paths to earnings growth and stock rerating. We are also increasing our exposure to Enviri Corporation after its recent separation, as the new company still appears undervalued despite strong recent gains. To fund these moves, we are selling three positions where the path to value has become less clear. In this piece we…
SELECT NOTES ON NEW BUYS & SELLS:
Barnes & Noble Education (BNED) is the largest campus retail and course materials provider in the U.S., operating bookstores across roughly 700 college and university campuses. An improved business model and its emerging impact on BNED’s earnings power and growth rates were important factors in our decision to add BNED.