Wasatch Global Investors, an asset management company, released its “Small Cap Growth Strategy” Q2 2026 investor letter. A copy of the letter can be downloaded here. Small-cap equities experienced strong gains in the second quarter, primarily driven by companies associated with artificial intelligence (AI). However, the leadership within this sector remains narrow. Unprofitable companies and those benefiting from rapid AI-driven demand performed well. As a result, the strategy underperformed compared to the Russell 2000® Growth Index, which gained 25.71%. The strategy’s disciplined focus on higher-quality businesses caused it to trail the benchmark, though several AI-related holdings contributed positively. The strategy prioritizes companies with sustainable growth potential, emphasizing the importance of quality investments. Overall, Strategy seeks to balance the transformative potential of AI with a commitment to long-term, quality investments. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, the Wasatch Small Cap Growth Strategy highlighted The Ensign Group, Inc. (NASDAQ:ENSG). The Ensign Group, Inc. (NASDAQ:ENSG) is a healthcare services company that provides skilled nursing, senior living, and rehabilitative services. On July 24, 2026, The Ensign Group, Inc. (NASDAQ:ENSG) closed at $172.99 per share. One-month return of The Ensign Group, Inc. (NASDAQ:ENSG) was 9.36%, and its shares gained 17.06% over the past 52 weeks. The Ensign Group, Inc. (NASDAQ:ENSG) has a market capitalization of $10.11 billion.
Wasatch Small Cap Growth Strategy stated the following regarding The Ensign Group, Inc. (NASDAQ:ENSG) in its Q2 2026 investor update:
“While the market environment favoring low-quality companies was a large reason for our relative underperformance compared to the benchmark, we also held stocks that lost ground in the period and that too weighed on relative results. The largest of those detractors was The Ensign Group, Inc. (NASDAQ:ENSG), an operator of skilled-nursing and senior-living facilities. Shares came under pressure after a short-seller report questioned the company’s quality-of-care metrics, staffing practices and certain related-party business arrangements. Ensign Group is a longtime holding in the portfolio, and we know the company’s management team well. We spoke with the team after the report, and we continue to believe that Ensign is one of the most compliance-conscious firms in the health-care space and view it as one of our best ideas in the sector.”
The Ensign Group, Inc. (NASDAQ:ENSG) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 37 hedge fund portfolios held The Ensign Group, Inc. (NASDAQ:ENSG) at the end of the first quarter, up from 35 in the previous quarter. While we acknowledge the risk and potential of The Ensign Group, Inc. (NASDAQ:ENSG) 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 The Ensign Group, Inc. (NASDAQ:ENSG) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered The Ensign Group, Inc. (NASDAQ:ENSG) and shared ClearBridge SMID Cap Growth Strategy’s views on the company. 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.
