American Vanguard Corp. (AVD) Slid Despite Clear Operational Improvement

Riverwater Partners, an investment management company, released its “Micro Opportunities Strategy” Q4 2025 investor letter. A copy of the letter can be downloaded here. Both Q4 and the full year 2025 were challenging for the strategy, which struggled to match the benchmark performance in Q4 and FY2025. The underweight exposure in speculative areas of the market led to the underperformance in the second half of the year. Low-quality stocks with poor fundamentals outperformed the market in the year. The strategy’s emphasis on high-quality stocks lagged behind the broader market trends. Heading to 2026, the Strategy focuses on micro-cap companies with broader sales and growth trajectories and believes that the low-quality stock market rallies will be short-lived. In addition, you can check the fund’s top five holdings to determine its best picks for 2025.

In its fourth-quarter 2025 investor letter, Riverwater Partners Micro Opportunities Strategy highlighted American Vanguard Corporation (NYSE:AVD) as one of the performance detractors. American Vanguard Corporation (NYSE:AVD) is a chemical, biological, and biorational products manufacturer for agricultural, commercial, and consumer uses. The one-month return for American Vanguard Corporation (NYSE:AVD) was 10.82%, and its shares lost 15.35% over the last 52 weeks. On January 16, 2026, American Vanguard Corporation (NYSE:AVD) stock closed at $4.3 per share, with a market capitalization of $122.413 million.

Riverwater Partners Micro Opportunities Strategy stated the following regarding American Vanguard Corporation (NYSE:AVD) in its fourth quarter 2025 investor letter:

“American Vanguard Corporation (NYSE:AVD), a developer and marketer of agricultural products, underperformed during the quarter despite clear evidence of operational improvement. Since the appointment of a new CEO, management has executed on a turnaround plan that has meaningfully strengthened the business, though the stock price has moved in the opposite direction—an example of the inefficiencies often present in micro-cap equities. Inventory levels have been materially reduced and are now more manageable, declining approximately 20% year over year, while gross margins expanded sharply to 29% from 15%. Adjusted EBITDA improved to $8 million from $2 million in the prior year, reflecting better execution, cost discipline, and pricing. While we remain cognizant of the risks inherent in the agricultural end markets, we believe AVD is clearly on a path toward a significantly stronger and more durable operating profile than the market currently reflects.”

In another article, we covered American Vanguard Corporation (NYSE:AVD) and shared Riverwater Partners Micro Opportunities Strategy’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.