Long Cast Advisers, an independent registered investment adviser, released its Q2 2026 investor letter. A copy can be downloaded here. The firm reported strong earnings in the second quarter, with results improving 20%, bringing year-to-date returns to +19%. While performance trailed the Russell 2000 and iShares US MicroCap ETF, it remained well ahead of the iShares SmallCap EAFE (ex-N. Am) ETF. Since inception in 2015, cumulative returns stand at 343% (15% CAGR), reflecting the firm’s strategy of concentrated, patient investments in small and micro‑cap companies. The firm remains cautious in this environment, emphasizing patience and endurance while avoiding margin and volatility. In addition, please check the firm’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Long Cast Advisers highlighted Pro-Dex, Inc. (NASDAQ:PDEX). Pro-Dex, Inc. (NASDAQ:PDEX) is a global medical device company that designs, develops, manufactures, and sells powered surgical instruments for medical device OEMs. On August 7, 2026, Pro-Dex, Inc. (NASDAQ:PDEX) closed at $65.56 per share. The one-month return of Pro-Dex, Inc. (NASDAQ:PDEX) was 7.88%, and its shares gained 72.87% over the past 52 weeks. Pro-Dex, Inc. (NASDAQ:PDEX) has a market capitalization of $209.32 million.
Long Cast Advisers stated the following regarding Pro-Dex, Inc. (NASDAQ:PDEX) in its Q2 2026 investor letter:
“In 2Q26, Pro-Dex, Inc. (NASDAQ:PDEX), PESI and MTRX were the largest contributors. The PDEX pitch offered an attempt to quantify the anticipated incremental benefits to operations if Zimmer succeeds with the mBos robot commercialization (a corrected version of the slide is below). The milestones, prices and margins are all derived from public filings and we assume four effectors per system sale, as an informed estimate.
Zimmer’s purchase of Monogram last year included “contingent valuation rights” (CVRs) that pay out $3.41 / share in each year from 2028 to 2030 that mBos gross revenues exceed certain hurdles. Based on these estimates, we calculated the number of systems needed to achieve those revenues, and it triangulates to a capital sale in the range of ~$1M per machine, in line with the cost of Stryker’s Mako platform. Stryker sold 860 units in its first three years, so the forecast 609 units to trigger the final CVR seems achievable. And even if the timing is wrong or our estimates imprecise, as long as the direction is right – and Zimmer is putting significant resources behind the launch – once the system launches, PDEX could experience an exceptional transformation in operating cash flow that would justify a substantially higher corporate value. This is why it remains a top position.”
Pro-Dex, Inc. (NASDAQ:PDEX) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 3 hedge fund portfolios held Pro-Dex, Inc. (NASDAQ:PDEX) at the end of the first quarter, compared to 1 in the previous quarter. While we acknowledge the risk and potential of Pro-Dex, Inc. (NASDAQ:PDEX) 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 Pro-Dex, Inc. (NASDAQ:PDEX) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Pro-Dex, Inc. (NASDAQ:PDEX) and shared Long Cast Advisers’ insight on the company from the previous quarter. In addition, please check out our hedge fund investor letters Q2 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.
