Rewey Asset Management, an investment management firm, released its “RAM Smid Composite” investor letter for the first quarter of 2026. A copy of the letter can be downloaded here. The Composite reports a return of 9.21% in Q1 2026, outperforming the Russell 2500 Value Total Return index, which gained 4.77%. The index rose 11.08% until late February but declined later due to the Iran conflict and rising oil prices. The Index’s performance signals a shift in investor focus from larger-cap tech stocks to undervalued and neglected small and mid-cap companies. Despite the market environment, Rewey remains unchanged in its investment philosophy, emphasizing financially robust companies that can withstand market volatility and exploit strategic opportunities. In addition, please check the Composite’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Rewey Asset Management highlighted DNOW Inc. (NYSE:DNOW) as a newly added position. DNOW Inc. (NYSE:DNOW) is a leading distributor of energy and industrial products focusing on pipe, valves, fittings, and pumps. On April 21, 2026, DNOW Inc. (NYSE:DNOW) closed at $11.94 per share. One-month return of DNOW Inc. (NYSE:DNOW) was 0.87%, and its shares lost 21.03% over the past 52 weeks. DNOW Inc. (NYSE:DNOW) has a market capitalization of $2.28 billion.
Rewey Asset Management stated the following regarding DNOW Inc. (NYSE:DNOW) in its Q1 2026 investor letter:
“We initiated a position in DNOW Inc. (NYSE:DNOW), a distributor of energy and industrial products. Spun off from National Oilwell Varco in 2014, DNOW has grown revenue and improved profitability over the past five years despite a weak upstream E&P environment. In November 2025, DNOW merged with its largest competitor, MRC Global, forming a $2.22 billion company with a diversified revenue mix: approximately 41% upstream energy, 21% midstream, 21% gas utilities, and 17% downstream and industrial.
We bought shares following the sharp sell-off after DNOW Inc. reported 4Q25 earnings. In our view, the release led to investor neglect due to numerous merger-related accounting charges and news that legacy MRC Global was experiencing significant issues with its Oracle ERP conversion. We believe this disruption has obscured the merger’s substantial revenue and cost synergies, as well as a potential cyclical recovery in upstream and chemical spending…” (Click here to read the full text)
DNOW Inc. (NYSE:DNOW) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 28 hedge fund portfolios held DNOW Inc. (NYSE:DNOW) at the end of the fourth quarter, compared to 30 in the previous quarter. While we acknowledge the risk and potential of DNOW Inc. (NYSE:DNOW) 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 DNOW Inc. (NYSE:DNOW) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered DNOW Inc. (NYSE:DNOW) and shared the list of best trading and distribution 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.
