What Makes Natural Gas Services (NGS) a Unique Bet?

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] - The strategy anticipates that the current rally in low-quality stocks will be short-lived, shifting focus towards micro-cap companies with broader sales and growth trajectories for 2026 [1] Company Highlights - Natural Gas Services Group, Inc. (NYSE:NGS) was highlighted as a recent addition to the strategy, with a market capitalization of $422.818 million and a stock price of $33.64 as of January 16, 2026 [2] - NGS has shown a one-month return of 2.94% and a 52-week gain of 20.19%, indicating positive performance trends [2] - NGS operates in the Permian region, providing natural gas compression units and is largely price and commodity agnostic, focusing on volume rather than commodity economics [3] - A significant portion of NGS's revenue is secured under long-term contracts, which provides stability [3] - The company is optimizing its portfolio by increasing its focus on large horsepower compressors (greater than 1,000HP) while reducing reliance on smaller units, which currently account for about 25% of revenue [3] - NGS's access to large horsepower compressors positions it advantageously in a tight market, potentially improving utilization and margin profiles [3]