Prosper Stars & Stripes, a long/short equity fund, recently released its second-quarter 2026 investor letter. The letter can be downloaded here. In Q2 2026, the portfolio delivered a strong net return of +30.1% compared to the Russell 2000 Index’s +21.5% return and the HFRX Equity Hedge Index’s +10.3% return. The long book drove performance, generating a 43.2% gross contribution, while average net exposure remained relatively modest at 47%. U.S. economic growth remained resilient despite inflation concerns, elevated energy prices, and geopolitical uncertainty. Markets rallied sharply after easing U.S.-Iran tensions pushed oil prices lower, supporting renewed risk appetite. Small-cap equities benefited significantly, with Information Technology, Industrials, and Health Care leading gains, while Energy declined as crude prices fell. Year to date, the Composite returned +23.7%, slightly ahead of the Russell 2000’s +22.6% and well above the HFRI Equity Hedge Index’s +9.7%. Additionally, you can review the Portfolio’s top 5 holdings to see its best picks for 2026.
In its second-quarter 2026 investor letter, Prosper Stars & Stripes highlighted Cable One, Inc. (NYSE:CABO). Cable One, Inc. (NYSE:CABO) is a US-based data, video, and voice services provider. On September 8, 2026, Cable One, Inc. (NYSE:CABO) closed at $23.03 per share. Over the past month, Cable One, Inc. (NYSE:CABO) declined 31.48%, and its shares lost 85.49% over the past 52 weeks. Cable One, Inc. (NYSE:CABO) has a market capitalization of $144.51 million, and its stock has traded within a 52-week range of $21.98 and $180.74.
Prosper Stars & Stripes stated the following regarding Cable One, Inc. (NYSE:CABO) in its Q2 2026 investor letter:
“Cable One, Inc. (NYSE:CABO) was the second largest contributor to our short book during the quarter. Cable One provides cable broadband in rural markets, where it once enjoyed pricing power and high barriers to entry. But industries are dynamic and new competition has changed the company’s position. Our process kept Cable One on our focus list through that transformation and allowed us to revisit it repeatedly; we have shorted the stock five times over the last four years. Increasing competition is an excellent short driver, and Cable One faced pressure from multiple directions at once, including fiber overbuilders, fixed wireless, and satellite internet. Broadband is a commodity, so when lower-priced alternatives entered its markets, Cable One had no meaningful way to differentiate and began losing share. In Q1 2026, the company reported a 7% revenue decline and an earnings decline of approximately 33%. Management compounded the damage by recognizing the shift late and allocating capital to asset purchases at peak multiples. The combination of leverage, subscriber losses, and falling prices have pressured margins and now threatens the company’s terminal value. We covered our position during the quarter.”
