Legacy Ridge Capital Management, a Colorado-based hedge fund, released its mid-2026 investor letter. A copy of the letter can be downloaded here. The letter reports strong performance, with a net return of 15.7% in the first half of the year, noting subdued volatility despite owning cyclical businesses. AI concerns and the Iran War drove market narratives. Initially, concerns over AI threatening business models negatively impacted various sectors, while hard assets like airlines and energy infrastructure gained attention. The latter narrative involved the Iran War, which disrupted global oil supply but did not cause oil prices to spike as anticipated. The firm believes microeconomic signals are positive for most portfolio holdings despite market noise. Please review the Funds’ top five holdings to gain insights into their key selections for 2026.
In its Q2 2026 investor letter, Legacy Ridge Capital Management highlighted Summit Midstream Corporation (NYSE:SMC). Summit Midstream Corporation (NYSE:SMC) is a midstream energy infrastructure assets company. On August 4, 2026, Summit Midstream Corporation (NYSE:SMC) closed at $30.38 per share, reflecting a market capitalization of $419.67 million. Summit Midstream Corporation (NYSE:SMC) posted a one-month return of 2.19%, while its shares gained 21.96% over the past 52 weeks.
Legacy Ridge Capital Management stated the following regarding Summit Midstream Corporation (NYSE:SMC) in its Q2 2026 investor letter:
“We sold Summit Summit Midstream Corporation (NYSE:SMC) in the first half of the year and reallocated the capital to an existing energy position. SMC was a massive investing mistake I made all the way back in 2017 and adopted into the partnership at its founding in 2018. We begrudgingly held out hope for radical change up until early 2026. While the position became meaningfully smaller as assets grew and its value plummeted, the negative impact to performance in the early years still gives me nightmares since it single handedly cost me (it was only my money the first 2-years thankfully) ~10% of my capital and flipped the partnership’s first year performance from a positive to a negative return. The combination of me reaching for yield, not focusing enough on declining oil/gas production in a couple basins where they operated, and creeping leverage metrics, all led to a downward spiral in cash flow that was hard to escape. To be fair, change did occur throughout the years, most notably under current CEO Heath Deneke, who we still think saved the company and some of our investment. But a more aggressive and direct strategy to create shareholder value never materialized and now we feel like there are better opportunities elsewhere.”
Summit Midstream Corporation (NYSE:SMC) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 10 hedge fund portfolios held Summit Midstream Corporation (NYSE:SMC) at the end of the first quarter, up from 8 in the previous quarter. While we acknowledge the risk and potential of Summit Midstream Corporation (NYSE:SMC) 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 Summit Midstream Corporation (NYSE:SMC) 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 Q2 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.
