Michigan-based investment advisor Cedar Grove Capital Management recently released its first quarter 2026 investor letter. A copy of the letter can be downloaded here. Cedar Grove Capital Management’s Multi-Strategy Composite posted a -23.0% net return since inception, compared to -5.6% for the Russell 2000, -5.9% for the Russell Microcap, and -5.5% for the S&P 500. Timing is key for early fund success, yet predicting external shocks during volatile macroeconomic periods is impossible. Rather than speculate on macro risks, it’s advisable to invest in strong companies at reasonable prices with good growth prospects. The recent downturn, called a “SaaS apocalypse,” was an opportunity to buy quality stocks that were undervalued despite better fundamentals and potential AI-driven gains. In February and early March, nearly all portfolio holdings reported strong earnings. However, the outbreak of war in Iran quickly overshadowed these gains, causing a rapid market selloff. While macro factors hurt performance in Q1, the firm is confident that its companies will do well in Q2 and beyond. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Cedar Grove Capital Management highlighted Nektar Therapeutics (NASDAQ:NKTR). Nektar Therapeutics (NASDAQ:NKTR) is a biopharmaceutical company focusing on discovering and developing medicines in the field of immunotherapy. On April 16, 2026, Nektar Therapeutics (NASDAQ:NKTR) closed at $83.99 per share. One-month return of Nektar Therapeutics (NASDAQ:NKTR) was 16.89%, and its shares gained 784.35% over the past 52 weeks. Nektar Therapeutics (NASDAQ:NKTR) has a market capitalization of $2.42 billion.
Cedar Grove Capital Management stated the following regarding Nektar Therapeutics (NASDAQ:NKTR) in its Q1 2026 investor letter:
“Nektar Therapeutics (NASDAQ:NKTR) is another biotechnology company with a drug asset, rezpegaldesleukin (“Rezpeg”), that primarily targets atopic dermatitis (AD, or eczema) and alopecia areata. Right now, many of the most effective treatment offerings for AD are done via JAK inhibitors, but are largely unsafe, which requires patients to use less effective drugs. Rezpeg has shown competitive efficacy with a clean safety profile and, importantly, strong durability and response deepening in maintenance data, along with infrequent dosing (potentially quarterly), positioning it as a best-in-class option for patients who fail first-line biologics. The AD market is large, with over 80 million patients suffering from the disease globally, generating >$50 billion in sales. If Nektar is able to show positive data in its P3 trial, then peak sales could be anywhere from $3 – $5 billion against a current EV of just ~$2 billion. Similar to our ABVX trade, the ideal scenario would be a buyout with commercialization coming second.”
Nektar Therapeutics (NASDAQ:NKTR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 39 hedge fund portfolios held Nektar Therapeutics (NASDAQ:NKTR) at the end of the fourth quarter, up from 36 in the previous quarter. For the fourth quarter of 2025, Nektar Therapeutics (NASDAQ:NKTR) generated $21.8 million in revenue, bringing the total revenue for the full year 2025 to $55.2 million. While we acknowledge the risk and potential of Nektar Therapeutics (NASDAQ:NKTR) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Nektar Therapeutics (NASDAQ:NKTR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Nektar Therapeutics (NASDAQ:NKTR) and shared a bullish thesis on the company. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.
Disclosure: None. This article is originally published at Insider Monkey.
