Michigan-based investment advisor Cedar Grove Capital Management recently released its first quarter 2026 investor letter. A copy of the letter can be downloaded here. Cedar Grove Capital Management’s Multi-Strategy Composite posted a -23.0% net return since inception, compared to -5.6% for the Russell 2000, -5.9% for the Russell Microcap, and -5.5% for the S&P 500. Timing is key for early fund success, yet predicting external shocks during volatile macroeconomic periods is impossible. Rather than speculate on macro risks, it’s advisable to invest in strong companies at reasonable prices with good growth prospects. The recent downturn, called a “SaaS apocalypse,” was an opportunity to buy quality stocks that were undervalued despite better fundamentals and potential AI-driven gains. In February and early March, nearly all portfolio holdings reported strong earnings. However, the outbreak of war in Iran quickly overshadowed these gains, causing a rapid market selloff. While macro factors hurt performance in Q1, the firm is confident that its companies will do well in Q2 and beyond. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Cedar Grove Capital Management highlighted Evolv Technologies Holdings, Inc. (NASDAQ:EVLV). Evolv Technologies Holdings, Inc. (NASDAQ:EVLV) is a US based security screening products and specific services manufacturer, known for its Evolv Express. On April 16, 2026, Evolv Technologies Holdings, Inc. (NASDAQ:EVLV) closed at $6.46 per share. One-month return of Evolv Technologies Holdings, Inc. (NASDAQ:EVLV) was 18.69%, and its shares gained 100.45% over the past 52 weeks. Evolv Technologies Holdings, Inc. (NASDAQ:EVLV) has a market capitalization of $1.19 billion.
Cedar Grove Capital Management stated the following regarding Evolv Technologies Holdings, Inc. (NASDAQ:EVLV) in its Q1 2026 investor letter:
“Evolv Technologies Holdings, Inc. (NASDAQ:EVLV): Mass shootings are unfortunately becoming more commonplace in the U.S. these days, with the number through the end of March 31st already up 35% y/y. EVLV aims to help with that by providing various customers (arenas, government buildings, hospitals, educational centers, etc) with AI-integrated hardware that can detect different forms of firearms and knives before they can become a threat. EVLV has >1,000 customers and deployed >8,000 systems to-date. The company operates via hardware + software (SaaS) while allowing customers to either buy the hardware outright with a lower subscription contract or a lower hardware price with a higher subscription contract. This mix shift has led the company to end FY’25 with >$120 million in ARR (+21.3% y/y), inflecting positive on a cash flow basis and sitting on a net cash pile (~$40 million). Once again, we are bullish companies with strong tailwinds, and while, unfortunately, the tailwinds here are mass shootings, they don’t seem to be coming down anytime soon, which allows EVLV to continue compounding.”
