Limoneira Company (LMNR): Underperformed in Q1 2025 Amid Strategic Shift to Internal Growth
Riverwater Partners, an investment management company, released its “Small Cap Strategy” Q1 2025 investor letter. A copy of the letter can be downloaded here. The Small Cap Core Strategy outperformed the Russell 2000 in Q1 2025, driven by strong stock selection and sector allocation. Within this strategy, the firm focuses on bottom-up fundamental research rather than making top-down macroeconomic bets. While much of the market discourse today is centered on tariffs and U.S. fiscal policy, the firm’s focus remains on identifying high-quality companies. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its first-quarter 2025 investor letter, Riverwater Partners Small Cap Strategy highlighted stocks such as Limoneira Company (NASDAQ:LMNR). Limoneira Company (NASDAQ:LMNR) is an agribusiness and real estate development company. The one-month return of Limoneira Company (NASDAQ:LMNR) was -0.38%, and its shares lost 22.06% of their value over the last 52 weeks. On June 26, 2025, Limoneira Company (NASDAQ:LMNR) stock closed at $15.86 per share, with a market capitalization of $286.574 million.
Riverwater Partners Small Cap Strategy stated the following regarding Limoneira Company (NASDAQ:LMNR) in its Q1 2025 investor letter:
"Limoneira Company (NASDAQ:LMNR) was our top detractor and underperformed in the first quarter of 2025, primarily due to the conclusion of its strategic review during this period, opting to focus on internal growth initiatives rather than pursuing external alternatives. This decision, while aimed at long-term value creation, may have contributed to short-term investor uncertainty, impacting stock performance. In short, our thesis remains that the company’s assets currently trade at less than half of their true private market value. This is supported by the fact that management's strategy to increase cash flows and returns on capital is sound, focusing on: Converting lemon acreage to avocados which are 5 times more profitable per acre • Monetizing land and water rights • Optimizing existing lemon acreage to improve cash flow stability and lessen market volatility."
A team of packing house workers packaging specialty citrus for customer orders.
.Limoneira Company (NASDAQ:LMNR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 6 hedge fund portfolios held Limoneira Company (NASDAQ:LMNR) at the end of the first quarter, which was 5 in the previous quarter. In the second quarter of fiscal year 2025, Limoneira Company (NASDAQ:LMNR) reported total net revenue of $35.1 million, compared to $44.6 million in the same quarter of the previous fiscal year. While we acknowledge the potential of Limoneira Company (NASDAQ:LMNR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
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