Riverwater Partners Sustainable Value Strategy Exited Cinemark Holdings (CNK) as Box Office Results Underperformed Expectations

Riverwater Partners, an investment management company, released its “Sustainable Value Strategy” Q4 2025 investor letter. A copy of the letter can be downloaded here. The Strategy underperformed the Russell 2500 Index during the fourth quarter as well as for the full year. Stock selection drove the underperformance of the Strategy in the quarter. The Strategy’s emphasis on high-quality stocks lagged behind broader market trends. In addition, please check the Strategy’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Riverwater Partners Sustainable Value Strategy highlighted stocks like Cinemark Holdings, Inc. (NYSE:CNK). Cinemark Holdings, Inc. (NYSE:CNK) is an entertainment company that engages in the motion picture exhibition business. Cinemark Holdings, Inc. (NYSE:CNK) shares traded between $21.60 and $34.01 over the past 52 weeks. On January 22, 2026, Cinemark Holdings, Inc. (NYSE:CNK) stock closed at $24.12 per share. One-month return of Cinemark Holdings, Inc. (NYSE:CNK) was 5.51%, and its shares lost 8.64% of their value over the last three months. Cinemark Holdings, Inc. (NYSE:CNK) has a market capitalization of $2.83 billion.

Riverwater Partners Sustainable Value Strategy stated the following regarding Cinemark Holdings, Inc. (NYSE:CNK) in its fourth quarter 2025 investor letter:

“We exited two positions during the quarter: Cinemark Holdings, Inc. (NYSE:CNK) was originally purchased on the view that normalized box office trends, improving studio release slates, and disciplined cost control would drive meaningful free cash flow inflection and balance sheet deleveraging. However, we exited the position as fourth-quarter box office results materially underperformed expectations. In addition, increasing strategic uncertainty, specifically the prospect of Netflix acquiring Warner Bros., represents a potential structural overhang for the exhibition industry by accelerating direct-to-consumer distribution and weakening the long-term negotiating position of theaters. While Cinemark remains a well-run operator, these factors materially reduced our conviction in the medium-term earnings power and risk-adjusted return profile of the stock.”

In another article, we covered Cinemark Holdings, Inc. (NYSE:CNK) and shared the list of most favored communication services stocks according to hedge funds. 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.