Minot Light Capital Partners, an investment management company, released its “Capital Appreciation Fund” Q1 2026 Investor Letter. A copy of the letter can be downloaded here. The fund declined by 2.7% in the first quarter of 2026 due to a sharp macro-driven sector rotation following geopolitical tensions, which triggered inflation fears and rising interest rate expectations. This scenario led to a shift in investor focus toward sectors such as energy, defense, and AI-linked stocks, while the fund’s core exposure to healthcare, consumer, and idiosyncratic industrials lagged. Despite this setback, the firm maintains a constructive long-term outlook, suggesting that the current market volatility and consensus-driven market narratives are creating attractive opportunities in out-of-favor sectors where it continues to find compelling valuations and expects eventual mean reversion to drive future returns. In addition, you can check the Fund’s top five holdings to determine its best picks for 2026.
In its first-quarter 2026 investor letter, Minot Light Capital Appreciation Fund highlighted stocks like ThredUp Inc. (NASDAQ:TDUP). ThredUp Inc. (NASDAQ:TDUP) operates an online resale marketplace for secondhand apparel, footwear, and accessories. The one-month return of ThredUp Inc. (NASDAQ:TDUP) was 1.18% while its shares traded between $3.08 and $12.28 over the last 52 weeks. On May 12, 2026, ThredUp Inc. (NASDAQ:TDUP) stock closed at approximately $4.29 per share, with a market capitalization of about $553.58 million.
Minot Light Capital Appreciation Fund stated the following regarding ThredUp Inc. (NASDAQ:TDUP) in its Q1 2026 investor letter:
“When we look at our other top detractors this quarters, you will hear a similar theme around former leading gainers becoming detractors after large-stock runs and quarterly results that disappointed the Street, such as ThredUp (NASDAQ:TDUP), which we fully expect to be a leading gainer again. We continue to own all of our top-5 detractors this quarter and have actually been buying more of the most of these names recently.”
ThredUp Inc. (NASDAQ:TDUP) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 40 hedge fund portfolios held ThredUp Inc. (NASDAQ:TDUP) at the end of the fourth quarter, which was 31 in the previous quarter. While we acknowledge the risk and potential of ThredUp Inc. (NASDAQ:TDUP) 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 ThredUp Inc. (NASDAQ:TDUP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered ThredUp Inc. (NASDAQ:TDUP) and shared the list of the most shorted penny stocks to buy. 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.
