What Makes Arq (ARQ) a Worthy Holding?

Minot Light Capital Partners, an investment management company, released its Q3 2025 investment letter. A copy of the letter can be downloaded here. In the quarter, Minot Light generated solid returns for limited partners, with a net of 7.6%. However, on a net basis, the performance underperformed the benchmarks, particularly the micro-cap benchmark’s 17.1% return. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Minot Light Capital Partners highlighted stocks such as Arq, Inc. (NASDAQ:ARQ). Arq, Inc. (NASDAQ:ARQ) is an environmental technology company. The one-month return for Arq, Inc. (NASDAQ:ARQ) was -9.14%, and its shares lost 53.28% over the last 52 weeks. On December 23, 2025, Arq, Inc. (NASDAQ:ARQ) stock closed at $3.28 per share, with a market capitalization of $140.036 million.

Minot Light Capital Partners stated the following regarding Arq, Inc. (NASDAQ:ARQ) in its third quarter 2025 investor letter:

“Arq, Inc. (NASDAQ:ARQ): Arq is one of the largest producers of activated carbons in the United States. Activated carbons are used by a wide variety of industries with the end goal of purifying and removing contaminants in water, air, and soil. Arq owns the Five Forks Mine in Saline, LA, which primarily produces lignite coal, the principal input into the company’s powdered activated carbon (PAC) products. In 2023, the company purchased feedstock in Corbin, KY giving it access to high quality recovered bituminous coal reserves, the principal input into the company’s granulated activated carbon (GAC) products. We find that Arq is extremely well positioned in the current environment given that it is the only domestic activated carbon producer with a fully vertically integrated supply chain.

Historically, the company’s primary revenue source has been the slow-growing PAC business. We have been impressed with CEO Robert Rasmus’s management of the more mature PAC business since his arrival in July 2023. Rasmus’s focus has been on eliminating negative margin PAC contracts and cutting operating expenses, which has resulted in gross margins expanding from 28% to over 39% in the last twelve months, leading the company to generate positive operating cash flow in FY24…” (Click here to read the full text)

In another article, we covered Arq, Inc. (NASDAQ:ARQ) and shared the list of best micro-cap stocks to invest in according to analysts. In addition, please check out our hedge fund investor letters Q3 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.