Prosper Stars & Stripes, a long/short equity fund, recently released its first-quarter 2026 investor letter. A copy of the letter is available to download here. In Q1 2026, the portfolio underperformed with a net return of (-5.6%) compared to the Russell 2000 Index’s +0.9% return and the HFRX Equity Hedge Index’s -1.5% return. Long book performance was negative, while the short book contributed positively. Geopolitics significantly influenced the first quarter, contributing to increased inflation pressures and elevated energy prices. Additionally, you can review the Portfolio’s top 5 holdings to see its best picks for 2026.
In its first-quarter 2026 investor letter, Prosper Stars & Stripes highlighted Modine Manufacturing Company (NYSE:MOD) as a notable contributor. Modine Manufacturing Company (NYSE:MOD) is an industrial company focuses on thermal management products and solutions. On June 17, 2026, Modine Manufacturing Company (NYSE:MOD) closed at $283.88 per share. One-month return of Modine Manufacturing Company (NYSE:MOD) was 13.50%, and its shares gained 195.40% over the past 52 weeks. Modine Manufacturing Company (NYSE:MOD) has a market capitalization of $14.99 billion.
Prosper Stars & Stripes stated the following regarding Modine Manufacturing Company (NYSE:MOD) in its Q1 2026 investor letter:
“Modine Manufacturing Company (NYSE:MOD) was the top contributor in our long book in the first quarter. The company has been undergoing a classic industrial transformation story. Through a series of acquisitions and divestitures, we believe management has repositioned Modine’s deep thermal engineering expertise away from slower growth end markets like automotive and toward higher-growth, structurally advantaged markets such as AI data centers. With the announced spin-off of its Performance Technologies segment, Modine will become a pure play Climate Solutions business with a focus on data center cooling, commercial HVAC, and refrigeration. We have found success investing in high-growth, value-added suppliers, and we believe Modine exemplifies this approach. Over the past three years, Modine’s data center business has delivered annual revenue growth in excess of 60% per year. This growth has driven EBITDA margins from 9% in FY2023 to an expected 17% by FY2027. Hyperscalers are expected to spend roughly $725 billion on AI capex in FY2026, and the chips powering this buildout require advanced thermal management solutions like those Modine provides. Consistent with our valuation discipline, we exited the position in March as the EV/EBITDA multiple reached 20x, which we viewed as fair value.”
Modine Manufacturing Company (NYSE:MOD) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 61 hedge fund portfolios held Modine Manufacturing Company (NYSE:MOD) at the end of the first quarter, up from 59 in the previous quarter. In the fourth quarter of fiscal 2026, Modine Manufacturing Company’s (NYSE:MOD) revenue increased 47% driven by growth in Climate Solutions. While we acknowledge the risk and potential of Modine Manufacturing Company (NYSE:MOD) 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 MODINE MANUFACTURING COMPANY (NYSE:MOD) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Modine Manufacturing Company (NYSE:MOD) and shared the list of fastest-growing data center cooling stocks to Invest in. 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.
