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 LENSAR, Inc. (NASDAQ:LNSR). LENSAR, Inc. (NASDAQ:LNSR) is a commercial stage medical device company focusing on developing laser systems for the treatment of cataracts and the management of pre-existing or surgically induced corneal astigmatism. On April 17, 2026, LENSAR, Inc. (NASDAQ:LNSR) closed at $5.93 per share. One-month return of LENSAR, Inc. (NASDAQ:LNSR) was -2.31%, and its shares lost 57.00% over the past 52 weeks. LENSAR, Inc. (NASDAQ:LNSR) has a market capitalization of $71.73 million.
Cedar Grove Capital Management stated the following regarding LENSAR, Inc. (NASDAQ:LNSR) in its Q1 2026 investor letter:
“LENSAR, Inc. (NASDAQ:LNSR) was a merger arbitrage trade that was going on for almost the better part of a year. Having approved an offer from Alcon (ALC) for $14/share last March, the deal kept getting pushed back but was still within the window outlined in the original merger agreement. Despite what would be a large share of the femtosecond laser-assisted cataract surgery (FLACS) market, a new FTC under the Trump administration seemed to be pro-merger, especially after allowing the Live Nation (LYV) suit to be settled in 4 a way that largely benefitted the company.
However, not even a month after extending the merger, LNSR announced that the deal was being terminated. We exited that position the day after the announcement, but we’re still optimistic that the company could get a second chance at life once management gets back on track. We shared more about those thoughts here presents itself again.”
LENSAR, Inc. (NASDAQ:LNSR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 6 hedge fund portfolios held LENSAR, Inc. (NASDAQ:LNSR) at the end of the fourth quarter, compared to 8 in the previous quarter. While we acknowledge the risk and potential of LENSAR, Inc. (NASDAQ:LNSR) 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 LENSAR, Inc. (NASDAQ:LNSR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In addition, please check out our hedge fund investor letters Q1 2026 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.
