Here’s Why Riverwater Partners Micro Opportunities Strategy Exited National CineMedia (NCMI)

Core Insights - Riverwater Partners' "Micro Opportunities Strategy" faced challenges in Q4 and FY2025, underperforming against benchmarks due to underweight exposure in speculative market areas and a focus on high-quality stocks [1][2] Company Analysis - National CineMedia, Inc. (NASDAQ:NCMI) is highlighted as a key stock in the investor letter, with a market capitalization of $360.312 million and a one-month return of -0.26%, while its shares have lost 43.53% over the past 52 weeks [2] - The investment thesis for National CineMedia was based on expected recovery in cinema advertising volumes and free cash flow post-restructuring, but the company exited the position due to weaker-than-expected box office trends and reduced advertiser demand [3] - Despite being the dominant cinema advertising platform, concerns about theatrical relevance and marketing budgets, along with market speculation regarding vertical integration, have diminished confidence in National CineMedia's earnings recovery [3] Market Trends - The strategy anticipates that the current rally in low-quality stocks will be short-lived, focusing instead on micro-cap companies with broader sales and growth trajectories as it moves into 2026 [1]