Core Insights - Riverwater Partners' Small Cap Strategy reported solid results in Q3 2025 but lagged behind the benchmark due to market preference for lower-quality companies [1] - The strategy focuses on higher-quality companies with strong fundamentals and a clear path to profitability, positioning itself well in a challenging market [1] Company Performance - Modine Manufacturing Company (NYSE:MOD) was highlighted as a strong performer, with a one-month return of 8.96% and a 52-week gain of 11.44% [2] - As of December 15, 2025, Modine's stock closed at $142.27, with a market capitalization of $7.49 billion [2] - Modine's thermal management solutions are benefiting from increased spending on AI-related infrastructure, particularly in data centers [3] Market Position and Valuation - Despite significant valuation expansion, Riverwater Partners maintains its position in Modine due to its strong market position and the ongoing demand for data center infrastructure to support AI workloads [3] - Modine's sales for Q2 of fiscal 2026 increased by 12%, driven by growth in Climate Solutions [4] - Modine is not among the top 30 most popular stocks among hedge funds, with 49 hedge fund portfolios holding its shares at the end of Q3, unchanged from the previous quarter [4]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgency to invest now [1][13] - The energy demands of AI technologies are highlighted, with data centers consuming as much energy as small cities, leading to concerns about power grid strain and rising electricity prices [2][3] Investment Opportunity - A specific company is presented as a significant investment opportunity, owning critical energy infrastructure assets that are essential for supporting the anticipated surge in energy demand from AI data centers [3][6] - This company is characterized as a "toll booth" operator in the AI energy boom, benefiting from the increasing need for electricity as AI technologies expand [4][5] Market Position - The company is noted for its unique position in the energy sector, owning nuclear energy infrastructure and being capable of executing large-scale engineering, procurement, and construction projects across various energy sectors [7][8] - It is described as debt-free, with a substantial cash reserve that constitutes nearly one-third of its market capitalization, making it financially robust compared to other firms in the energy sector [8][10] Growth Potential - The company also holds a significant equity stake in another AI-related venture, providing investors with indirect exposure to multiple growth engines in the AI space without the associated premium costs [9][10] - The stock is considered undervalued, trading at less than seven times earnings, which presents a compelling investment opportunity given its ties to the growing AI and energy sectors [10][11] Industry Trends - The narrative emphasizes the ongoing disruption caused by AI across traditional industries, suggesting that companies that adapt to AI will thrive while those that do not will struggle [11][12] - The influx of talent into the AI sector is noted, ensuring continuous innovation and advancements, which further supports the investment thesis in AI-related companies [12][13]

Company Performance - Modine's stock closed at $165.19, reflecting a +1.56% increase from the previous day, outperforming the S&P 500's gain of 0.21% [1] - Over the past month, Modine's shares have risen by 10.35%, while the Auto-Tires-Trucks sector gained 2.04% and the S&P 500 increased by 0.89% [1] Earnings Projections - The upcoming EPS for Modine is projected at $1.02, indicating a 10.87% increase compared to the same quarter last year [2] - The Zacks Consensus Estimate for revenue is $763.38 million, representing a 23.77% increase from the previous year [2] Full Year Estimates - For the full year, earnings are projected at $4.62 per share and revenue at $3.04 billion, showing increases of +14.07% and +17.58% respectively from the prior year [3] - Recent analyst estimate revisions suggest a favorable outlook on Modine's business health and profitability [3] Valuation Metrics - Modine's Forward P/E ratio stands at 35.23, which is significantly higher than the industry average of 16.59, indicating a premium valuation [6] - The company has a PEG ratio of 1.04, compared to the industry average PEG ratio of 1.22 [7] Industry Context - Modine operates within the Automotive - Original Equipment industry, which is ranked 88th by Zacks, placing it in the top 36% of over 250 industries [8] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Core Insights - Modine Manufacturing reported a significant insider sale by President and CEO Neil David Brinker, who sold 31,871 shares for approximately $5.1 million on December 2 [2][3] - The sale represents about 11.8% of Brinker's direct ownership, reducing his stake from 270,183 to 238,312 shares [7] - The company has shown strong performance, with a 39.4% increase in share price year-to-date, significantly outperforming the S&P 500 index [9] Transaction Details - The transaction involved the sale of 31,871 shares at a weighted average purchase price of $160.56, resulting in a total transaction value of around $5.1 million [3] - Post-transaction, Brinker's direct ownership value is approximately $38.2 million based on the market close on December 2 [3] - This sale is the only open-market transaction reported by Brinker since March 2023, with other transactions being administrative in nature [4] Company Overview - Modine Manufacturing is a leading global supplier of heat transfer and thermal management solutions, with operations across North America, South America, Europe, and Asia [6] - The company reported a total revenue of $2.69 billion and a net income of $187.80 million for the trailing twelve months [5] - Modine's diversified customer base and broad product offerings position it competitively within the automotive parts and industrial HVAC markets [6] Performance Metrics - The company experienced a fiscal second-quarter sales growth of 12%, reaching $738.9 million for the period ending September 30 [9] - Management has increased its annual sales growth guidance to a range of 15% to 20%, up from the previous estimate of 10% to 15% [9]

Core Viewpoint - Modine Manufacturing has experienced significant stock growth, attributed to positive analyst recommendations, with shares up by 8% week-to-date [1] Analyst Updates - DA Davidson's Matt Summerville reiterated a buy recommendation for Modine, setting a price target of $200 per share [2] - Summerville's analysis followed discussions with Modine's CEO, highlighting the company's potential for substantial growth driven by sustainable demand and innovation [3] - UBS analyst Neal Burk also initiated coverage with a buy recommendation and a fair value assessment of $173 per share [4] Industry Context - Modine is a key supplier of cooling systems for data centers, which are currently seeing heavy investment due to the resource-intensive nature of artificial intelligence [5] - The ongoing trend in AI is expected to provide significant growth opportunities for Modine, positioning the company favorably for future success [6]

Core Insights - Modine has introduced a stainless steel variant of its TurboChill DCS chiller range, enhancing the hydraulic capacity for direct liquid cooling systems, particularly in high-density AI applications [2][5] - The new design improves circuit cleanliness and system reliability, reducing contamination and build-up, while maintaining structural stability under extreme thermal loads [3][5] - The TurboChill DCS Stainless Steel can eliminate the need for in-row coolant distribution units (CDUs), simplifying infrastructure and potentially improving Power Usage Effectiveness (PUE) [4][6] Product Features - The stainless steel variant is designed for high-pressure environments and is suitable for global applications, meeting Seismic Design Category D [5] - It operates efficiently at ambient temperatures up to 55°C (131°F) and uses low Global Warming Potential (GWP) refrigerant R1234ze (GWP 1.37) [5] - The modular 'V' frame coil arrangement and Enhanced Free Cooling technology contribute to reduced energy consumption [5] Company Background - Modine has over 100 years of experience in thermal management solutions, focusing on engineering a cleaner and healthier world [8] - The company employs more than 11,000 people globally and operates in North America, South America, Europe, and Asia [8]

Group 1: Artisan Small Cap Fund Performance - Artisan Small Cap Fund's Investor Class fund ARTSX returned 8.69%, Advisor Class fund APDSX posted 8.75%, and Institutional Class fund APHSX returned 8.73% in Q3 2025, compared to a return of 12.19% for the Russell 2000 Growth Index [1] - Global equities rallied in Q3 2025, with major US indices like Russell 1000®, Russell Midcap®, and Russell 2000® reaching record highs [1] Group 2: Modine Manufacturing Company Overview - Modine Manufacturing Company (NYSE:MOD) offers thermal management products and solutions, with a one-month return of -16.30% and a 52-week gain of 4.53% [2] - As of November 14, 2025, Modine's stock closed at $132.02 per share, with a market capitalization of $6.951 billion [2] Group 3: Modine Manufacturing Company Growth Drivers - Modine is experiencing strong growth due to increased business with existing hyperscale customers and new accounts in the hyperscale segment [3] - Rising demand in the US and Southeast Asia, along with expansion into advanced product lines like rack-level and modular data center cooling solutions, has fueled Modine's momentum [3] - The company has significantly raised its revenue expectations for the year [3] Group 4: Hedge Fund Interest and Market Position - Modine Manufacturing Company was held by 49 hedge fund portfolios at the end of Q2 2025, an increase from 45 in the previous quarter [4] - While Modine shows potential as an investment, certain AI stocks are considered to offer greater upside potential and less downside risk [4]

Core Insights - Modine has officially opened a new manufacturing facility in Franklin, Wisconsin, aimed at expanding its data center cooling capacity and supporting the growth of digital infrastructure in the U.S. [1][2] - The new 155,000-square-foot facility is part of a multi-year $100 million investment to scale production of Airedale by Modine™ data center cooling solutions, expected to create over 300 new jobs by March 2026 [2][5] - Wisconsin is becoming a data center hub due to its abundant water supply, reliable electricity, and naturally cool climate, which help reduce cooling costs for energy-intensive facilities [4] Company Commitment - Modine's investment reflects a strategic commitment to delivering innovative cooling solutions for mission-critical operations and enhancing its engineering, product development, and testing capabilities [2][5] - The company has a rich heritage in Wisconsin, having been founded in Racine in 1916, and continues to emphasize its local roots while expanding its operations [3][4] Future Expansion - In addition to the Franklin facility, the $100 million investment will also include new manufacturing facilities in Grand Prairie, Texas, and expansions in Grenada, Mississippi, and Jefferson City, Missouri [5] - The expansion is designed to support the growing demand for data center solutions and the evolving needs of the digital economy [4][5]

Core Insights - Panoramic Capital increased its stake in Modine Manufacturing Company by purchasing an additional 26,547 shares, bringing its total holdings to 65,116 shares valued at $9.26 million as of September 30, 2025 [1][2][8] Company Overview - Modine Manufacturing Company is a global leader in engineered heat transfer solutions, focusing on complex thermal management needs for OEMs and commercial clients [6] - The company operates with a diverse product portfolio and a multi-segment approach, providing a competitive advantage in both established and emerging markets [6] Financial Performance - As of November 14, 2025, Modine's stock price was $132.02, with a market capitalization of $6.95 billion [4][8] - The company reported trailing twelve months (TTM) revenue of approximately $2.69 billion and net income of approximately $186.20 million [4][8] Market Position - Modine's Climate Solutions segment is experiencing accelerating demand, particularly for data center solutions, with management expecting net sales to rise between 15% and 20% in the fiscal year ending next March [11] - Adjusted EBITDA is projected to increase between 12% and 20%, reaching a range of $440 million to $470 million [11] Investment Insights - Panoramic Capital's investment in Modine represents 4.16% of its 13F assets under management (AUM), ranking as the fund's 5th-largest holding [8] - The value of Modine shares held by Panoramic Capital rose by 144% over the three-month period following the purchase [7]

Core Insights - Investors are evaluating Aptiv PLC (APTV) and Modine (MOD) for potential undervalued stock opportunities in the Automotive - Original Equipment sector [1] Valuation Metrics - APTV has a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to MOD, which has a Zacks Rank of 3 (Hold) [3] - APTV's forward P/E ratio is 10.65, significantly lower than MOD's forward P/E of 32.29, suggesting APTV may be undervalued [5] - APTV's PEG ratio is 0.84, while MOD's PEG ratio is 0.95, indicating APTV's expected EPS growth is more favorable [5] - APTV has a P/B ratio of 1.87, compared to MOD's P/B of 7.4, further highlighting APTV's relative undervaluation [6] - APTV's Value grade is A, while MOD's Value grade is C, reinforcing the perception that APTV is the better investment option [6]