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 Limoneira Company (NASDAQ:LMNR) as one of the top performance detractors. Limoneira Company (NASDAQ:LMNR) is an agribusiness operator. On January 16, 2026, Limoneira Company (NASDAQ:LMNR) stock closed at $14.24 per share. One-month return of Limoneira Company (NASDAQ:LMNR) was -3.06%, and its shares lost 38.22% of their value over the last 52 weeks. Limoneira Company (NASDAQ:LMNR) has a market capitalization of $258.016 million.
Riverwater Partners Micro Opportunities Strategy stated the following regarding Limoneira Company (NASDAQ:LMNR) in its fourth quarter 2025 investor letter:
“Limoneira Company (NASDAQ:LMNR) was our top underperformer in 2025 as near-term results failed to reflect the value of long-cycle investments the company has been making for several years, testing investor patience despite a sound strategic foundation. As a 132-year-old California agribusiness and the largest avocado grower in the United States, Limoneira has methodically expanded its avocado acreage, planting roughly 1,500 acres, with approximately 700 acres still progressing toward full production—a process that inherently takes four to five years and cannot be accelerated.
Short-term earnings pressure, combined with the company’s restructuring away from lemons to focus on avocados and the conclusion of a strategic review after bids failed to reflect intrinsic value, weighed on sentiment. However, this long-duration capital allocation increasingly looks well-timed given that the U.S. imports roughly 90% of its avocados from Mexico, where cartel-related disruptions, USDA inspection suspensions, and tariff uncertainty have highlighted supply chain fragility. As Limoneira’s Southern California orchards approach peak production—maturing during periods when Mexican supply is seasonally constrained—we believe the disconnect between near-term stock performance and long-term asset value underscores exactly the type of patient, hard-to-replicate opportunity we seek to own through difficult periods.”
Limoneira Company (NASDAQ:LMNR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 9 hedge fund portfolios held Limoneira Company (NASDAQ:LMNR) at the end of the third quarter, compared to 12 in the previous quarter. While we acknowledge the risk and potential of Limoneira Company (NASDAQ:LMNR) 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 Limoneira Company (NASDAQ:LMNR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Limoneira Company (NASDAQ:LMNR) and shared Riverwater Sustainable Value 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.
