Merion Road Capital Management, an investment advisor, released its Q1 2026 Investor Letter. A copy of the letter can be downloaded here. Merion Road Capital Management reported that its Merion Road Small Cap Fund gained 3.1% in the first quarter of 2026, outperforming the Russell 2000, which rose 0.9%. Merion Road’s long-only large-cap portfolio declined 3.7% amid broader market weakness reflected in the S&P 500. The performance in the small-cap fund was supported by strong contributions from holdings, driven by accelerating aerospace demand and margin expansion. The firm continues to position itself around long-term tailwinds in aerospace, defense, and advanced technologies, citing rising global military spending, ongoing geopolitical tensions, and increasing demand for mission-critical systems as key drivers shaping its constructive outlook despite near-term volatility. In addition, you can check the Fund’s top five holdings to determine its best picks for 2026.
In its first-quarter 2026 investor letter, Merion Road Capital Management highlighted stocks like Frequency Electronics, Inc. (NASDAQ:FEIM). Frequency Electronics, Inc. (NASDAQ:FEIM) develops precision timing, frequency control, and synchronization products used in satellites, telecommunications, and defense applications. The one-month return of Frequency Electronics, Inc. (NASDAQ:FEIM) was 2.75% while its shares traded between $17.51 and $64.99 over the last 52 weeks. On May 15, 2026, Frequency Electronics, Inc. (NASDAQ:FEIM) stock closed at approximately $57.18 per share, with a market capitalization of about $562.76 billion.
Merion Road Capital Management stated the following regarding Frequency Electronics, Inc. (NASDAQ:FEIM) in its Q1 2026 investor letter:
“I have built a new position in Frequency Electronic Inc (NASDAQ:FEIM). FEIM is a 65-year-old company that leads in the design and development of high-precision time and frequency devices using quartz and rubidium oscillation. These devices allow for system location and navigation when GPS is unavailable as well as wireless, secure communication. FEIM systems have visited all the sun’s known planets, landed on the moon, and assisted manned exploration on Apollo, the Space Shuttle and the International Space Station. FEIM oscillators launched nearly 50 years ago on Voyager 2 continue to function today.
On a trailing basis roughly 40% of their revenue comes from government satellites, 55% from government non-space applications which are mostly military in nature, and the remaining from commercial andindustrial customers. FEIM is at the forefront of notable growth areas including:…” (Click here to read the full text)
Frequency Electronics, Inc. (NASDAQ:FEIM) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 11 hedge fund portfolios held Frequency Electronics, Inc. (NASDAQ:FEIM) at the end of the fourth quarter, which was 11 in the previous quarter. While we acknowledge the risk and potential of Frequency Electronics, Inc. (NASDAQ:FEIM) 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’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
In another article, we covered Frequency Electronics, Inc. (NASDAQ:FEIM) and shared the list of hot tech 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.
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