Riverwater Partners Bought Middleby (MIDD) Ahead of Its Business Separation Catalyst

Riverwater Partners, an investment management company, released its 'Small Cap Strategy' Q2 2026 investor letter. The letter can be downloaded here. The Small Cap Strategy underperformed the Russell 2000 in the second quarter as the benchmark experienced one of its strongest risk-on rallies in recent memory, although the strategy remained ahead year-to-date. The quarter was defined by accelerating AI investment, energy market disruptions, and renewed investor appetite for higher-beta stocks, creating headwinds for the firm's quality-focused approach and healthcare positioning. Despite this, stock selection contributed positively in energy, materials, and financials, while healthcare and consumer discretionary detracted due to the fund's disciplined avoidance of speculative businesses. Looking ahead, the firm remains cautiously optimistic, focusing on opportunities created by market dislocations, including AI infrastructure enablers, select consumer companies, healthcare innovators, and energy businesses trading below intrinsic value. The strategy continues to emphasize high-quality companies with strong management teams and attractive valuations, positioning the portfolio for a potential rotation away from speculative market leadership. In addition, please check the Strategy's top five holdings to know its best picks in 2026. In its second-quarter 2026 investor letter, Riverwater Partners Small Cap Strategy highlighted The Middleby Corporation (NASDAQ:MIDD). The Middleby Corporation (NASDAQ:MIDD) is a leading player in the foodservice industry. On August 28, 2026, The Middleby Corporation (NASDAQ:MIDD) closed at $112.75 per share. The one-month return of The Middleby Corporation (NASDAQ:MIDD) was -17.98% and its shares gained 1.19% over the past 52 weeks. The Middleby Corporation (NASDAQ:MIDD) has a market capitalization of $5.14 billion with a 52-week trading range between $89.14 - $148.55. Riverwater Partners Small Cap Strategy stated the following regarding The Middleby Corporation (NASDAQ:MIDD) in its Q2 2026 investor letter: "In May we established a position in The Middleby Corporation (NASDAQ:MIDD), the commercial foodservice and food processing equipment leader, funded by trims of Modine (MOD) and Kodiak Gas Services (KGS). Middleby delivered its strongest organic growth in two years, with commercial foodservice up nearly 10% and food processing up 25%, repurchased almost 5% of its shares outstanding in a single quarter, and set a July 6 date for the spin-off of its food processing business. We believe the separation will let the market properly value two focused businesses, and we wanted to own the company ahead of that catalyst."