Wasatch Global Investors, an asset management company, released its “Micro Cap Fund” Q1 2026 investor letter. A copy of the letter can be downloaded here. The Wasatch Micro-Cap Fund—Investor Class fell 3.11% in Q1 2026 but outperformed the Russell Microcap Growth benchmark, which declined 4.25%. Sectors like industrials, consumer discretionary, and financials contributed positively to the fund’s performance, while information technology detracted. The US-Iran conflict and concerns about AI disruption led to market volatility in the quarter. The fund maintains a balanced risk portfolio, with strong fundamentals positioning it for long-term growth. In addition, you can check the Fund’s top 5 holdings for its best picks for 2026.
In its first-quarter 2026 investor letter, Wasatch Micro Cap Fund highlighted Red Violet, Inc. (NASDAQ:RDVT). Red Violet, Inc. (NASDAQ:RDVT) is a software and services company that provides analytics and information solutions focusing on identity intelligence and risk management. On June 18, 2026, Red Violet, Inc. (NASDAQ:RDVT) closed at $55.10 per share. One-month return of Red Violet, Inc. (NASDAQ:RDVT) was 8.81%, and its shares gained 16.12% over the past 52 weeks. Red Violet, Inc. (NASDAQ:RDVT) has a market capitalization of $777.4 million.
Wasatch Micro Cap Fund stated the following regarding Red Violet, Inc. (NASDAQ:RDVT) in its Q1 2026 investor letter:
“On the downside, shares of Red Violet, Inc. (NASDAQ:RDVT), a main detractor from Fund performance compared to the benchmark, fell victim to the quarter’s AI-driven selloff in software stocks despite reporting exceptional results. The company leverages proprietary technologies and advanced analytics to deliver identity intelligence solutions used by financial, retail and law-enforcement organizations to prevent fraud, acquire customers and mitigate risk. Red Violet provides its services through a cloud-native software platform that offers insights and security that we believe would be extremely difficult to replicate. In addition, the company’s business model is highly scalable, as the costs associated with the data used for its background checks are fixed—and we expect Red Violet’s margins to continue to improve as more customers utilize that data. We view Red Violet as relatively insulated from AI disruption given these advantages, and we added to the position on weakness.”
Red Violet, Inc. (NASDAQ:RDVT) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 19 hedge fund portfolios held Red Violet, Inc. (NASDAQ:RDVT) at the end of the first quarter, compared to 17 in the previous quarter. In Q1 2026, Red Violet, Inc.’s (NASDAQ:RDVT) revenue increased 17% year-over-year to $25.8 million. While we acknowledge the risk and potential of Red Violet, Inc. (NASDAQ:RDVT) 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 RED VIOLET, INC. (NASDAQ:RDVT) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Red Violet, Inc. (NASDAQ:RDVT) and shared Riverwater Partners Micro Opportunities Strategy’s insights on 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.
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Disclosure: None. This article is originally published at Insider Monkey.
