Core Viewpoint - Lakeland Industries, Inc. has appointed Lee D. Rudow to its Board of Directors, effective April 9, 2026, to enhance operational and M&A strategies as the company aims to expand its global footprint in the fire and industrial markets [1][4]. Group 1: Appointment and Experience - Lee D. Rudow brings over 33 years of experience in various leadership roles across startups, private equity-funded, and large industrial companies, currently serving as CEO of Transcat, Inc. for over 14 years [2][3]. - Rudow has a proven track record with 67 consecutive quarters of year-over-year service revenue growth at Transcat, highlighting his capability in driving growth and executing transformative acquisitions [2]. Group 2: Strategic Importance - The appointment of Rudow is seen as timely, providing Lakeland with insights into operational execution and strategic M&A integration, which are crucial for scaling its Fire and Industrial platforms globally [4]. - Rudow expressed his commitment to expanding Lakeland's portfolio and capabilities, aiming to position the company for long-term success in the protective clothing market [4]. Group 3: Company Overview - Lakeland Fire + Safety manufactures a comprehensive line of protective clothing and accessories for various industries, including healthcare and first responders, and offers decontamination, repair, and rental services [5]. - The company sells its products globally, reaching over 50 countries, with significant markets including China, the European Economic Community, Canada, and various regions in Latin America and Asia [5].

Core Viewpoint - Frequency Electronics, Inc. (FEIM) has significantly outperformed its industry peers, with a 41.7% increase in share price over the past six months, compared to the industry's 3.9% growth, driven by strong demand in defense and aerospace sectors, recurring contracts, and innovative technologies [1][14] Company Overview - Frequency Electronics is a leading provider of precision time and frequency generation technology, serving both commercial and U.S. Government sectors, with products including atomic clocks, oscillators, and power systems [3] - The company operates through two main segments, FEI-NY and FEI-Zyfer, focusing on applications in satellite payloads, secure communications, and military systems [3] Key Tailwinds - Robust demand from the U.S. Government and defense programs is a major growth driver, with recent contracts totaling approximately $6 million for secure communications systems [4] - The aerospace sector is also a focus, with significant contracts awarded, including $4.8 million for airborne-rated synchronization systems and $9.2 million for oscillators for environmental satellites [5][6] - The funded backlog increased to approximately $82 million by October 2025, indicating healthy demand, with 69% expected to be realized within the next 12 months [7] Innovation and R&D - The company is differentiating itself through innovation, particularly with the development of a Rubidium Atomic Clock for airborne applications, supported by over $2.3 million in R&D investments [8] Financial Position - FEIM maintains a strong working capital position of $31.3 million and a current ratio of 2.6:1, reflecting financial discipline [9] - A new $20 million share repurchase program indicates confidence in long-term value and commitment to enhancing shareholder returns [9] Challenges - The company faces challenges, including a decline in gross margins from 48.2% to 38.2% year over year, driven by a shift to lower-margin projects [10] - Operating income dropped 34.5% due to higher SG&A expenses and rising material costs, alongside dependence on U.S. government contracts [10] Valuation - From a valuation perspective, FEIM is trading at 6.59X trailing 12-month EV/sales, which is above the industry average of 3.7X and higher than peers like Transcat and Badger Meter [11]

Group 1 - Diamond Hill Capital's "Small Cap Strategy" reported a favorable performance in Q4 2025, with the Russell 2000 Index returning 2.19% and a yearly gain of 12.81% [1] - The health care sector was the best performer in the Russell 2000 Index, achieving an 18.6% return [1] - The Strategy outperformed the Russell 2000 Index in Q4 2025, returning 4.88% net of fees [1] Group 2 - Transcat, Inc. (NASDAQ:TRNS) was highlighted in the investor letter, providing calibration and laboratory instrument services to regulated industries [2][3] - Transcat, Inc. experienced a one-month return of 11.70% but saw a 52-week decline of 9.21%, with a market capitalization of $659.226 million as of February 4, 2026 [2] - The company reported a 21% increase in consolidated revenue to $83 million in the fiscal second quarter of 2026 [5] Group 3 - Transcat, Inc. has strong recurring revenue streams due to regulatory demands and a successful acquisition track record, alongside a solid balance sheet [3] - The company was held by 18 hedge fund portfolios at the end of Q3 2025, an increase from 12 in the previous quarter [5]

Group 1 - The article highlights that investors are looking for stocks that can deliver gains in 2026, particularly focusing on those that have experienced significant declines throughout the year [1] - It emphasizes that while some companies are genuinely struggling, others may have been affected by temporary setbacks or overly pessimistic market reactions, creating potential investment opportunities [2] - The analysis identifies stocks that have suffered steep declines but are receiving positive attention from analysts, specifically mentioning two stocks with a Strong Buy consensus rating [3] Group 2 - Transcat, an industrial support firm, provides essential services such as testing and calibration for sensitive equipment, operating a network of labs across the US, Canada, and Ireland [4] - The company has been in the testing and calibration business for over 60 years, serving more than 30,000 customers annually and offering over 500 lines of testing and measurement equipment [6] - Transcat's shares have fallen nearly 50% this year due to mixed earnings and margin compression, with a reported non-GAAP EPS of 44 cents in fiscal 2Q26, which was lower than the previous year and missed forecasts [7]

Core Insights - Prosper Stars & Stripes achieved a net return of +9.8% in Q3 2025, outperforming its peer group which returned +3.8% and the Russell 2000 Index which returned +12.4% [1] - Year-to-date, the fund returned +8.6%, lagging behind the HFRI's +13.6% and the Russell's +10.4% [1] Fund Performance - The long book of the fund delivered strong performance in both Q3 and year-to-date 2025 [1] - The short book detracted from performance in both periods [1] Company Focus: Transcat, Inc. - Transcat, Inc. (NASDAQ:TRNS) has seen a one-month return of -23.90% and a 52-week loss of 46.48%, with a market capitalization of $524.443 million as of November 27, 2025 [2] - The fund has increased its exposure to healthcare stocks, particularly focusing on companies providing essential services and products to the sector [3] Industry Trends - The healthcare sector is expected to regain growth momentum as headwinds from the pandemic ease, driven by population growth and technological advancements [3] - Significant capital expenditure projects announced by major pharmaceutical and healthcare supply chain companies are anticipated to create growth opportunities for Transcat [3] - The trend towards reshoring production to avoid supply disruptions is a priority for both government and corporate sectors, which may benefit Transcat [3] Investment Outlook - Transcat is positioned to capitalize on expanding growth opportunities due to its strong distribution and service platform in the healthcare sector [3] - The company is expected to surprise positively as the industry materializes hundreds of billions in incremental investments over the next few years [3] - A potential recovery of Transcat's stock price towards $90+ is projected within the next 12 months, based on a mid to high teens EBITDA multiple [3]

Core Insights - Transcat's third quarter results showed strong execution in distribution and rental businesses, with revenue growth exceeding Wall Street expectations [1] - The company reported a consolidated revenue increase of 21%, driven by robust demand in the higher-margin rental segment and the positive impact of recent acquisitions [1] - Despite revenue growth, non-GAAP profit per share fell short of analyst estimates due to higher costs, including those related to the CEO succession plan [1] Financial Performance - Revenue reached $82.27 million, surpassing analyst estimates of $79.51 million, reflecting a year-on-year growth of 21.3% and a 3.5% beat [6] - Adjusted EPS was $0.44, missing analyst expectations of $0.48 by 9.1% [6] - Adjusted EBITDA was $12.12 million, exceeding estimates of $11.61 million, with a margin of 14.7% [6] - Operating margin decreased to 4.3%, down from 5.5% in the same quarter last year [6] - Market capitalization stood at $516.3 million [6] Management Commentary - CFO Tom Barbato attributed rental business acceleration to the integration of Axiom Test Equipment and internal execution, while tempering expectations for continued margin expansion [6] - CEO Lee Rudow highlighted the successful integration of Essco Calibration, noting it exceeded expectations with strong management and seamless integration [6] - The company indicated that about a third of capital expenditures is allocated to rentals, reflecting the intertwined nature of rental and distribution operations [6] - The solutions business has stabilized and is expected to stop being a drag on overall growth metrics [6] - Growth in new acquisitions is attributed to a strong customer base in acquired regions, particularly in life sciences and medical devices, with expectations for continued but potentially moderating growth [6]

Core Insights - Watts Water Technologies, Inc. (WTS) reported third-quarter 2025 adjusted earnings per share (EPS) of $2.50, an increase from $2.03 in the prior-year quarter, beating the Zacks Consensus Estimate by 9.2% [1][9] - The company's quarterly net sales rose 13% year over year to $611.7 million, surpassing the Zacks Consensus Estimate by 5.9% [1][9] - Organic sales increased by 9% year over year, driven by favorable pricing, volume, and pull-forward demand [1][9] Acquisition and Integration - In the third quarter, WTS acquired Haws Corporation, enhancing its emergency safety and hydration solutions capabilities [2] - Integration and synergy efforts across Bradley, Josam, I-CON, and EasyWater are progressing ahead of expectations [2] Regional Performance - The Americas segment saw net sales increase by 1% to $464 million, with organic sales jumping 13% [5] - Europe reported net sales growth of 4% year over year to $112 million, but organic sales decreased by 2% [6] - APMEA experienced a 1% decline in net sales to $36 million, with organic sales remaining flat [7] Financial Performance - Gross profit increased by 16.1% year over year to $298.4 million, while operating income rose by 19.5% to $111.4 million [10] - Adjusted operating margin expanded by 110 basis points to 18.2%, driven by favorable pricing and productivity gains [11] Cash Flow and Liquidity - For the nine months ended September 28, 2025, WTS generated $247.3 million in cash from operating activities, up from $221.6 million in the prior-year period [12] - Free cash flow for the same period was $216 million, compared to $204.2 million a year ago [13] Guidance - WTS raised its full-year 2025 sales guidance to an expected increase of 7%-8%, up from the previous range of 2%-5% [16] - Adjusted EBITDA margin is now forecasted to be between 21.5% and 21.6%, indicating an improvement of 140 to 150 basis points [17] Stock Performance - Shares of WTS have gained 33.1% over the past year, significantly outperforming the Zacks Instruments - Control industry, which grew by 4.8% [4]

Group 1: Earnings Performance - Badger Meter reported quarterly earnings of $1.19 per share, exceeding the Zacks Consensus Estimate of $1.11 per share, and up from $1.08 per share a year ago [1] - The earnings surprise for this quarter was +7.21%, while the previous quarter had a surprise of -3.31% with actual earnings of $1.17 compared to an expected $1.21 [2] - Over the last four quarters, the company has surpassed consensus EPS estimates three times [2] Group 2: Revenue Performance - The company posted revenues of $235.65 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.74%, and up from $208.44 million year-over-year [3] - Badger Meter has topped consensus revenue estimates four times over the last four quarters [3] Group 3: Stock Performance and Outlook - Badger Meter shares have declined approximately 11.7% since the beginning of the year, contrasting with the S&P 500's gain of 14.5% [4] - The current consensus EPS estimate for the upcoming quarter is $1.12 on revenues of $230.07 million, and for the current fiscal year, it is $4.69 on revenues of $919.67 million [8] Group 4: Industry Context - The Instruments - Control industry, to which Badger Meter belongs, is currently ranked in the bottom 30% of over 250 Zacks industries, indicating potential challenges for stock performance [9] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment [6]

Core Viewpoint - Watts Water Technologies, Inc. (WTS) reported strong financial performance in Q2 2025, with adjusted EPS of $3.09, surpassing the Zacks Consensus Estimate by 15.3% [1][8] Financial Performance - Quarterly net sales increased by 8% year over year to $644 million, exceeding the Zacks Consensus Estimate by 6.1% [2][8] - Organic sales rose by 6% year over year, driven by favorable pricing, volume, and pull-forward demand in the Americas [2][8] - Gross profit increased by 14% year over year to $325.9 million, while operating income rose by 21% to $135.3 million [9] Segment Results - **Americas**: Net sales increased by 11% to $499 million, with organic sales up 10%. Adjusted operating margin expanded by 290 basis points to 27.2% [5][8] - **Europe**: Net sales decreased by 3% to $111 million, with an 8% decline in organic sales. Adjusted operating margin improved by 170 basis points to 11.7% despite volume declines [6] - **APMEA**: Net sales decreased by 3% to $34 million, with a flat adjusted operating margin of 18.9% [7] Cash Flow and Liquidity - For the six months ended June 29, 2025, cash from operating activities was $125 million, down from $130.9 million in the prior year [10] - Free cash flow for the same period was $105.1 million, compared to $119.7 million a year ago, primarily due to higher working capital investments [11] - As of June 29, 2025, the company had $369.3 million in cash and cash equivalents and $197.3 million in long-term debt [12] Guidance - For 2025, the company expects reported sales growth between 2% and 5%, with organic sales expected to be flat to increase by 3% [13] - Adjusted EBITDA margin is forecasted to be between 20.7% and 21.3%, indicating an improvement of 60 to 120 basis points [14] - For Q3 2025, reported sales are expected to increase by 4% to 7%, with organic sales projected to rise by 2% to 5% [15] Market Performance - Shares of WTS have gained 42.3% over the past year, significantly outperforming the Zacks Instruments - Control industry, which grew by 7.9% [3]